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FDI in the Restructuring of the Japanese Economy

Author

Listed:
  • Blomström, Magnus

    () (The European Institute of Japanese Studies)

  • Konan, Denise

    () (University of Hawaii at Manoa)

  • Lipsey, Robert E.

    () (National Bureau of Economic Research)

Abstract

This paper examines how inward and outward foreign direct investment (FDI) have influenced the restructuring of the Japanese economy and can be expected to continue to do so in the future. We find that outward investment has helped Japanese firms to sustain foreign market shares and contributed to the restructuring of the Japanese economy away from older industries. By shifting from exporting to affiliate production, there has been a geographical reallocation of the activities of Japanese firms, particularly those of multinational manufacturing firms. However, Japanese outward FDI is still not very large relative to the Japanese economy, despite the rapid growth since the mid-1980s, and there is still scope for significant increase when compared with the levels of most other OECD countries. Inward FDI will presumably have an even stronger impact on the restructuring of the Japanese economy. Although the stock of inward foreign direct investment is still very small, there are important changes under way. Deregulation has opened up much of the industrial and service sectors to foreign multinationals.

Suggested Citation

  • Blomström, Magnus & Konan, Denise & Lipsey, Robert E., 2000. "FDI in the Restructuring of the Japanese Economy," SSE/EFI Working Paper Series in Economics and Finance 371, Stockholm School of Economics.
  • Handle: RePEc:hhs:hastef:0371
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    References listed on IDEAS

    as
    1. Robert E. Lipsey & Magnus Blomstrom & Eric D. Ramstetter, 1998. "Internationalized Production in World Output," NBER Chapters,in: Geography and Ownership as Bases for Economic Accounting, pages 83-138 National Bureau of Economic Research, Inc.
    2. David E. Weinstein, 1997. "Foreign Direct Investment and Keiretsu: Rethinking U.S. and Japanese Policy," NBER Chapters,in: The Effects of U.S. Trade Protection and Promotion Policies, pages 81-116 National Bureau of Economic Research, Inc.
    3. Takatotshi Ito, 1996. "Japan and the Asian Economies: A 'Miracle' in Transition," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 27(2), pages 205-272.
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    Cited by:

    1. Frank L. BARTELS & Markus EICHER & Christopher BACHTROG & Gorazd REZONJA, 2009. "Foreign Direct Investment In Sub-Saharan Africa: Changing Location-Specific Advantages As Signals Of Competitiveness," The Developing Economies, Institute of Developing Economies, vol. 47(3), pages 244-278.
    2. René Belderbos & Kyoji Fukao & Keiko Ito & Wilko Letterie, 2013. "Global Fixed Capital Investment by Multinational Firms," Economica, London School of Economics and Political Science, vol. 80(318), pages 274-299, April.
    3. Nakije Myftar Kida, 2014. "Foreign Direct Investment Environment and Economic Growth," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 10(4), pages 31-41, August.
    4. Ruth Rios-Morales & Louis Brennan, 2007. "Ireland's Foreign Direct Investment Competitive Advantage and Japanese Outward Foreign Direct Investment," Asia Pacific Business Review, Taylor & Francis Journals, vol. 13(2), pages 201-231, April.
    5. Corduneanu, Carmen & Iovu, Laura Raisa, 2007. "Foreign Direct Investment and Regional Development in Romania," MPRA Paper 12926, University Library of Munich, Germany.
    6. Fukunari Kimura & Kozo Kiyota, 2004. "Enhancing the Benefits for India and Other Developing Countries in the Doha Development Agenda Negotiations," Working Papers 510, Research Seminar in International Economics, University of Michigan.
    7. Farrell, Roger & Gaston, Noel & Sturm, Jan-Egbert, 2004. "Determinants of Japan's foreign direct investment: An industry and country panel study, 1984-1998," Journal of the Japanese and International Economies, Elsevier, vol. 18(2), pages 161-182, June.

    More about this item

    Keywords

    Foreign Direct Investment; Multinational Corporations; Restructuring; Japan;

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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