IDEAS home Printed from
   My bibliography  Save this article

The U.S. Productivity Figures and Foreign Direct Investment in Japan


  • Benjamin Adam Abugri

    (Department of Economics and Finance, The University of Texas-Pan American, USA)

  • Gökçe A. Soydemir

    () (Department of Economics and Finance, The University of Texas-Pan American, USA)


In this paper, we present empirical evidence linking the movements in the U.S. $/Yen exchange rate and the U.S. productivity figures to the U.S. outbound foreign direct investment (FDI) in Japan by constructing a five variable vector autoregressive (VAR) model. Our results show a lagged and statistically significant negative response of the U.S. FDI to a one standard deviation increase in the U.S. productivity figures. We further find that a once and for all appreciation in the U.S. dollar increases the U.S. FDI in Japan which is consistent with the earlier findings in the literature. The U.S. export figures, however, are found to serve as a complement to the U.S. outbound FDI whereas the impact of the U.S. imports from Japan on the U.S. outbound FDI is found to be negative. The results support the view that a productivity increase in the U.S. decreases the amount of the U.S. outbound foreign direct investment in the long run.

Suggested Citation

  • Benjamin Adam Abugri & Gökçe A. Soydemir, 2002. "The U.S. Productivity Figures and Foreign Direct Investment in Japan," Review of Pacific Basin Financial Markets and Policies (RPBFMP), World Scientific Publishing Co. Pte. Ltd., vol. 5(01), pages 53-69.
  • Handle: RePEc:wsi:rpbfmp:v:05:y:2002:i:01:n:s0219091502000699
    DOI: 10.1142/S0219091502000699

    Download full text from publisher

    File URL:
    Download Restriction: Access to full text is restricted to subscribers

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item


    U.S. Productivity; Foreign Direct Investments; Exchange Rates and VAR Model;

    JEL classification:

    • G1 - Financial Economics - - General Financial Markets
    • G2 - Financial Economics - - Financial Institutions and Services
    • G3 - Financial Economics - - Corporate Finance and Governance


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wsi:rpbfmp:v:05:y:2002:i:01:n:s0219091502000699. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Tai Tone Lim). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.