The Determinants of and Prospects for Foreign Direct Investment in Japan
Although Japan experienced a significant jump in inward foreign direct investment (FDI) around the turn of the millennium, the level of inward FDI penetration remains much lower than in many other countries. Looking at the factors that determine Japan's attractiveness as an investment destination for foreign multinationals, this paper examines the prospects for future FDI inflows. Topics addressed include the macroeconomic outlook for Japan (an important factor for market-seeking FDI), political, social and cultural factors reflecting Japan's willingness to embrace globalization, and policies the government could pursue to attract more FDI. It is argued that although Japan has clearly "opened up," lingering unease over a more laissez-faire market economy and inward foreign inward remains widespread and certain patterns from the past are beginning to reappear. A key issue in this context are merger and acquisition (M&A) rules and their implications are discussed in detail. The paper concludes by suggesting that unless Japan embarks on further substantial deregulation, increases in FDI inflows are likely to remain moderate and inward FDI penetration will continue to significantly trail behind that in other major advanced economies.
|Date of creation:||May 2007|
|Contact details of provider:|| Postal: 2-1 Naka, Kunitachi City, Tokyo 186|
Web page: http://www.ier.hit-u.ac.jp/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Kee, Hiau Looi & Nicita, Alessandro & Olarreaga, Marcelo, 2006.
"Estimating trade restrictiveness indices,"
Policy Research Working Paper Series
3840, The World Bank.
- Ralph Paprzycki, 2006. "The Impact of Foreign Direct Investment in Japan: Case Studies of the Automobile, Finance, and Health Care Industries," Hi-Stat Discussion Paper Series d05-141, Institute of Economic Research, Hitotsubashi University.
- Ralph Paprzycki & Kyoji Fukao, 2005. "The Extent and History of Foreign Direct Investment in Japan," Hi-Stat Discussion Paper Series d05-84, Institute of Economic Research, Hitotsubashi University.
- Blomström, Magnus & Kokko, Ari, 2003.
"The Economics of Foreign Direct Investment Incentives,"
CEPR Discussion Papers
3775, C.E.P.R. Discussion Papers.
- Magnus Blomstrom & Ari Kokko, 2003. "The Economics of Foreign Direct Investment Incentives," NBER Working Papers 9489, National Bureau of Economic Research, Inc.
- Blomström, Magnus & Kokko, Ari, 2003. "The Economics of Foreign Direct Investment Incentives," EIJS Working Paper Series 168, The European Institute of Japanese Studies.
- Ralph Paprzycki, 2004. "What Caused the Recent Surge of FDI into Japan?," Hi-Stat Discussion Paper Series d04-31, Institute of Economic Research, Hitotsubashi University.
- Ralph Paprzycki & Kyoji Fukao, 2004. "Overcoming economic stagnation in Japan: The importance of total factor productivity and the potential contribution of foreign direct investment," Hi-Stat Discussion Paper Series d04-39, Institute of Economic Research, Hitotsubashi University.
- Adam S. Posen, 2004. "What Went Right in Japan," Policy Briefs PB04-06, Peterson Institute for International Economics.
- FUKAO Kyoji & MIYAGAWA Tsutomu, 2007. "Productivity in Japan, the US, and the Major EU Economies: Is Japan Falling Behind?," Discussion papers 07046, Research Institute of Economy, Trade and Industry (RIETI).
When requesting a correction, please mention this item's handle: RePEc:hst:hstdps:d07-211. 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: (Tatsuji Makino)
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.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with 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 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.