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Japan's Orientation towards Foreign Investments: Inertia Effects and Driving Force of Institutional Changes

Author

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  • Nir Kshetri

    (University of North Carolina at Greensboro, USA)

  • Ralf Bebenroth

    (Research Institute for Economics & Business Administration (RIEB), Kobe University, Japan)

Abstract

We use an institutional perspective to develop a framework for understanding the contexts, mechanisms and processes associated with institutions and institutional changes related to foreign investment in Japan. We examine power dynamics and relational boundaries between diverse actors and analyze why and how some components of institutions have changed and others have not. Also explored in this paper are the conflicting discourses that have been raised in regards to the participation of foreign investors. We also examine purposive efforts of various institutional entrepreneurs to change prevailing institutions in Japan. We assess structural factors working as sources of inertia in Japan's openness to FDI including the nature of capitalism, power of bureaucracy and culture and analyze various internal and external sources associated with exogenous shocks and gradual changes in institutions.

Suggested Citation

  • Nir Kshetri & Ralf Bebenroth, 2012. "Japan's Orientation towards Foreign Investments: Inertia Effects and Driving Force of Institutional Changes," Discussion Paper Series DP2012-12, Research Institute for Economics & Business Administration, Kobe University.
  • Handle: RePEc:kob:dpaper:dp2012-12
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    File URL: http://www.rieb.kobe-u.ac.jp/academic/ra/dp/English/DP2012-12.pdf
    File Function: First version, 2012
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    References listed on IDEAS

    as
    1. David Daokui Li & Junxin Feng & Hongping Jiang, 2006. "Institutional Entrepreneurs," American Economic Review, American Economic Association, vol. 96(2), pages 358-362, May.
    2. Satomi Kimino & David S. Saal & Nigel Driffield, 2007. "Macro Determinants of FDI Inflows to Japan: An Analysis of Source Country Characteristics," The World Economy, Wiley Blackwell, vol. 30(3), pages 446-469, March.
    3. Geoffrey M. Hodgson, 2003. "The hidden persuaders: institutions and individuals in economic theory," Cambridge Journal of Economics, Oxford University Press, vol. 27(2), pages 159-175, March.
    4. Kshetri, Nir & Palvia, Prashant & Dai, Hua, 2011. "Chinese institutions and standardization: The case of government support to domestic third generation cellular standard," Telecommunications Policy, Elsevier, vol. 35(5), pages 399-412, June.
    5. Dean, Thomas J. & Meyer, G. Dale, 1996. "Industry environments and new venture formations in U.S. manufacturing: A conceptual and empirical analysis of demand determinants," Journal of Business Venturing, Elsevier, vol. 11(2), pages 107-132, March.
    6. Paprzycki,Ralph & Fukao,Kyoji, 2012. "Foreign Direct Investment in Japan," Cambridge Books, Cambridge University Press, number 9781107411289, April.
    7. A. E. Fernández Jilberto, 1991. "Introduction," International Journal of Political Economy, Taylor & Francis Journals, vol. 21(1), pages 3-9, March.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Institutions; Institutional changes; Foreign investors; Japan; global financial crisis; Institutional entrepreneurs; Institutional field;

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