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Inbound foreign direct investment in Japan: A typology

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  • Magnier-Watanabe, Rémy
  • Lemaire, Jean-Paul

Abstract

While Japan has been attracting far less foreign investment than other mature economies, it could offer insights into FDI decision-making for international firms entering countries with a shrinking domestic market and increased international competition. Using a Delphi methodology with contributions from foreign direct investors and experts, we propose a model of inbound FDI in Japan and identify four types of investors based on the nature of investments and market maturity, namely empire builders, rescuers, niche players, and cherry-pickers. This framework, offering both descriptive and prescriptive components, highlights the importance of the predisposition and motives of local takeover targets and business partners in foreign market entry decisions. This model can help foreign firms take advantage of investment opportunities in Japan, and provide lessons for market entry in other mature economies facing similar conditions.

Suggested Citation

  • Magnier-Watanabe, Rémy & Lemaire, Jean-Paul, 2018. "Inbound foreign direct investment in Japan: A typology," International Business Review, Elsevier, vol. 27(2), pages 431-442.
    • Handle: RePEc:eee:iburev:v:27:y:2018:i:2:p:431-442
    DOI: 10.1016/j.ibusrev.2017.09.010
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    2. Yipeng Liu & Ralf Bebenroth & Yi Yang, 2022. "East-Meets-West: Mergers and Acquisitions challenges and opportunities in and out of Asia," Asian Business & Management, Palgrave Macmillan, vol. 21(5), pages 715-744, November.
    3. Hock Tsen Wong, 2022. "Asymmetric Real Exchange Rate and Foreign Direct Investment Determinants: An Empirical Study of Malaysia," Capital Markets Review, Malaysian Finance Association, vol. 30(2), pages 19-37.

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