IDEAS home Printed from
   My bibliography  Save this paper

Organisation, Motivations and Case Studies of Japanese Direct Investment in Real Estate 1985-94


  • Roger Farrell


Between 1985 and 1994 there was a remarkable rise and decline in Japanese real estate investment abroad which has been little documented or analysed, despite its economic scale and political impact. This paper is a further exploration of the nature and causes of this form of investment, following on from a broader study of its determinants in Pacific Economic Paper No. 271 of September 1997. It provides supporting evidence, through an examination of the organisation and motivations of investors, for the hypothesis that Japanese investors in real estate were predominantly influenced by the financial environment in Japan after the mid 1980s, rather than by more strategic factors such as their firm-specific advantages. According to traditional industrial organisation theory, FDI (foreign direct investment) is associated with investor control over assets and an active managerial role by investors. Hence, the purpose of FDI is to pursue a strategic international expansion by a firm, based on its specific proprietary advantages over local firms (Dunning 1981; 1993). Notably, Hymer (1976) categorised active investment as type II if it involved both control and management; alternatively, inactive investment, without control, is categorised as type I in nature. Evidence is provided that the corporate and financial organisational structure of Japanese real estate FDI did not exhibit type II features to any significant extent. It is argued that the organisational and corporate strengths of Japanese firms explain little of the pattern of real estate FDI over the 10 years in review. The paper concludes that Japanese real estate investment appears to be an exception to the traditional firm-specific model of FDI.

Suggested Citation

  • Roger Farrell, 1998. "Organisation, Motivations and Case Studies of Japanese Direct Investment in Real Estate 1985-94," Asia Pacific Economic Papers 282, Australia-Japan Research Centre, Crawford School of Public Policy, The Australian National University.
  • Handle: RePEc:csg:ajrcau:282

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. K Olds, 1995. "Globalization and the production of new urban spaces: Pacific Rim megaprojects in the late 20th century," Environment and Planning A, Pion Ltd, London, vol. 27(11), pages 1713-1743, November.
    2. K Olds, 1995. "Globalization and the Production of New Urban Spaces: Pacific Rim Megaprojects in the Late 20th Century," Environment and Planning A, , vol. 27(11), pages 1713-1743, November.
    3. Putnam, Robert D., 1988. "Diplomacy and domestic politics: the logic of two-level games," International Organization, Cambridge University Press, vol. 42(03), pages 427-460, June.
    Full references (including those not matched with items on IDEAS)

    More about this item

    JEL classification:

    • F00 - International Economics - - General - - - General


    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:csg:ajrcau:282. 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: (Akira Kinefuchi). 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.