IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/3737.html
   My bibliography  Save this paper

Japanese Foreign Direct Investment

Author

Listed:
  • Kenneth A. Froot

Abstract

Japan's outflows of foreign direct investment (FDI) have increased dramatically in recent years, to the point where Japan has become the world's largest overseas direct investor. This paper documents the increase in Japanese FDI, as well as its breakdown across industries and countries. Investments in real estate and financial services have grown most rapidly, as has Japanese FDI into North America, which now accounts for fully half of Japan's outflows. The paper then goes on to discuss and evaluate some of the most popular explanations for this explosion in investment: Japanese current account surpluses; actual or anticipated protectionism abroad; appreciated stock prices and value of the yen; and changes in international tax policy.

Suggested Citation

  • Kenneth A. Froot, 1991. "Japanese Foreign Direct Investment," NBER Working Papers 3737, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:3737
    Note: ITI ME IFM
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w3737.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Kenneth A. Froot & Jeremy C. Stein, 1991. "Exchange Rates and Foreign Direct Investment: An Imperfect Capital Markets Approach," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(4), pages 1191-1217.
    2. D.N. Saxena, 1989. "Foreign Direct Investment," Foreign Trade Review, , vol. 24(1), pages 76-97, April.
    3. Scholes, Myron S & Wolfson, Mark A, 1990. "The Effects of Changes in Tax Laws on Corporate Reorganization Activity," The Journal of Business, University of Chicago Press, vol. 63(1), pages 141-164, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Urata, Shujiro, 1998. "Explaining the poor performance of Japanese direct investment in the United States," Japan and the World Economy, Elsevier, vol. 10(1), pages 49-62, January.
    2. Roger Farrell, 2000. "Japanese Foreign Direct Investment in the World Economy 1951-1997," Asia Pacific Economic Papers 299, Australia-Japan Research Centre, Crawford School of Public Policy, The Australian National University.
    3. Akinleye Simeon Oludiran & Laleye Nicaise Abimbola, 2018. "Major Determinants of Foreign Direct Investment in the West African Economic and Monetary Region," Iranian Economic Review (IER), Faculty of Economics,University of Tehran.Tehran,Iran, vol. 22(1), pages 121-162, Winter.
    4. repec:jes:wpaper:y:2013:v:5:p:512-517 is not listed on IDEAS
    5. Barrell, Ray & Pain, Nigel, 1999. "Trade restraints and Japanese direct investment flows," European Economic Review, Elsevier, vol. 43(1), pages 29-45, January.
    6. John Howe, 1994. "Internationalisation, Trade and Foreign Direct Investment," RBA Annual Conference Volume (Discontinued), in: Philip Lowe & Jacqueline Dwyer (ed.),International Intergration of the Australian Economy, Reserve Bank of Australia.
    7. Belderbos, René & Wakasugi, Ryuhei & Zou, Jianglei, 2012. "Business groups, foreign direct investment, and capital goods trade: The import behavior of Japanese affiliates," Journal of the Japanese and International Economies, Elsevier, vol. 26(2), pages 187-200.
    8. Anusha Chari & Paige P. Ouimet & Linda L. Tesar, 2004. "Acquiring Control in Emerging Markets: Evidence from the Stock Market," NBER Working Papers 10872, National Bureau of Economic Research, Inc.
    9. Razvan Hagima, 2013. "The Fdi Flows Between The Triad Members," CES Working Papers, Centre for European Studies, Alexandru Ioan Cuza University, vol. 5(4), pages 512-517, December.
    10. Kyoji Fukao & Keiko Ito & Shigesaburo Kabe & Deqiang Liu & Fumihide Takeuchi, 2006. "Do Japanese Firms Fail to Catch up in Localization? An Empirical Analysis Based on Affiliate-level Data of Japanese Firms and a Case Study of Automobile Industry in China," Microeconomics Working Papers 21890, East Asian Bureau of Economic Research.
    11. Anusha Chari & Paige P. Ouimet & Linda L. Tesar, 2004. "Enhancing the Benefits for India and Other Developing Countries in the Doha Development Agenda Negotiations," Working Papers 511, Research Seminar in International Economics, University of Michigan.
    12. Bayoumi, Tamim & Lipworth, Gabrielle, 1998. "Japanese foreign direct investment and regional trade," Journal of Asian Economics, Elsevier, vol. 9(4), pages 581-607.
    13. Belderbos, Rene & Capannelli, Giovanni & Fukao, Kyoji, 2001. "Backward Vertical Linkages of Foreign Manufacturing Affiliates: Evidence from Japanese Multinationals," World Development, Elsevier, vol. 29(1), pages 189-208, January.
    14. Assaf Razin, 2002. "FDI Contribution to Capital Flows and Investment in Capacity," NBER Working Papers 9204, National Bureau of Economic Research, Inc.
    15. Yamawaki, Hideki, 1994. "International Competitiveness and the Choice of Entry Mode: Japanese Multinationals in U.S. and European Manufacturing Industries," Working Paper Series 424, Research Institute of Industrial Economics.
    16. Kenneth A. Froot & David B. Yoffie, 1993. "Trading Blocs and the Incentives to Protect: Implications for Japan and East Asia," NBER Chapters, in: Regionalism and Rivalry: Japan and the United States in Pacific Asia, pages 125-156, National Bureau of Economic Research, Inc.
    17. Kyoji Fukao & Keiko Ito & Shigesaburo Kabe & Deqiang Liu & Fumihide Takeuchi, 2006. "Are Japanese Firms Failing to Catch up in Localization? An Empirical Analysis Based on Affiliate-level Data of Japanese Firms and a Case Study of the Automobile Industry in China," Hi-Stat Discussion Paper Series d06-191, Institute of Economic Research, Hitotsubashi University.
    18. 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.
    19. Richard E. Caves, 1993. "Japanese Investment in the United States: Lessons for the Economic Analysis of Foreign Investment," The World Economy, Wiley Blackwell, vol. 16(3), pages 279-300, May.
    20. Hackett, Steven C. & Srinivasan, Krishna, 1998. "Do supplier switching costs differ across Japanese and US multinational firms?," Japan and the World Economy, Elsevier, vol. 10(1), pages 13-32, January.
    21. Peter Drysdale & Roger Farrell, 1999. "Perspectives on Japanese Investment, Employment and Management in Australia," Asia Pacific Economic Papers 290, Australia-Japan Research Centre, Crawford School of Public Policy, The Australian National University.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Marc Goergen & Luc Renneboog, 2004. "Shareholder Wealth Effects of European Domestic and Cross‐border Takeover Bids," European Financial Management, European Financial Management Association, vol. 10(1), pages 9-45, March.
    2. Dinuk Jayasuriya, 2011. "Improvements in the World Bank's Ease of Doing Business Rankings: Do they translate into greater foreign direct investment inflows?," Development Policy Centre Discussion Papers 1108, Development Policy Centre, Crawford School of Public Policy, The Australian National University.
    3. Shetty, Anand & Manley, John & Kyaw, Nyonyo, 2019. "The impact of exchange rate movements on mergers and acquisitions FDI," Journal of Multinational Financial Management, Elsevier, vol. 52.
    4. Hong, Seiwoong & Lee, Junyong & Oh, Frederick Dongchuhl & Shin, Donglim, 2023. "Religion and foreign direct investment," International Business Review, Elsevier, vol. 32(1).
    5. Cakici, Nusret & Hessel, Chris & Tandon, Kishore, 1996. "Foreign acquisitions in the United States: Effect on shareholder wealth of foreign acquiring firms," Journal of Banking & Finance, Elsevier, vol. 20(2), pages 307-329, March.
    6. Muhammad Tariq Majeed & Eatzaz Ahmad, 2009. "An Analysis of Host Country Characteristics that Determine FDI in Developing Countries: Recent Panel Data Evidence," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 14(2), pages 71-96, Jul-Dec.
    7. Martynova, M. & Renneboog, L.D.R., 2006. "Mergers and Acquisitions in Europe," Other publications TiSEM 531d24e9-4f1e-4df3-80db-d, Tilburg University, School of Economics and Management.
    8. Slemrod, J., 1990. "The Impact Of The Tax Reform Act Of 1986 On Foreign Direct Investment To And From The United States," Working Papers 256, Research Seminar in International Economics, University of Michigan.
    9. Gregory, Alan & McCorriston, Steve, 2005. "Foreign acquisitions by UK limited companies: short- and long-run performance," Journal of Empirical Finance, Elsevier, vol. 12(1), pages 99-125, January.
    10. Ms. Yuko Hashimoto & Mr. Konstantin Wacker, 2012. "The Role of Risk and Information for International Capital Flows: New Evidence from the SDDS," IMF Working Papers 2012/242, International Monetary Fund.
    11. Klein, Michael W. & Rosengren, Eric, 1994. "The real exchange rate and foreign direct investment in the United States : Relative wealth vs. relative wage effects," Journal of International Economics, Elsevier, vol. 36(3-4), pages 373-389, May.
    12. Mr. Joshua Aizenman, 1992. "Exchange Rate Flexibility, Volatility and the Patterns of Domestic and Foreign Direct Investment," IMF Working Papers 1992/020, International Monetary Fund.
    13. Doukas, John, 1995. "Overinvestment, Tobin's q and gains from foreign acquisitions," Journal of Banking & Finance, Elsevier, vol. 19(7), pages 1285-1303, October.
    14. Fee, C. Edward & Hadlock, Charles J. & Pierce, Joshua R., 2012. "What happens in acquisitions?," Journal of Corporate Finance, Elsevier, vol. 18(3), pages 584-597.
    15. Harry Grubert & John Mutti, 1991. "Financial Flows versus Capital Spending: Alternative Measures of U.S.-Canadian Investment and Trade in the Analysis of Taxes," NBER Chapters, in: International Economic Transactions: Issues in Measurement and Empirical Research, pages 293-320, National Bureau of Economic Research, Inc.
    16. Kuipers, David R. & Miller, Darius P. & Patel, Ajay, 2009. "The legal environment and corporate valuation: Evidence from cross-border takeovers," International Review of Economics & Finance, Elsevier, vol. 18(4), pages 552-567, October.
    17. Bruce Blonigen, 2005. "A Review of the Empirical Literature on FDI Determinants," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 33(4), pages 383-403, December.
    18. Robert L Conn & Andy Cosh & Paul M Guest & Alan Hughes, 2003. "The Impact on U.K. Acquirers of Domestic, Cross-border, Public and Private Acquisitions," Working Papers wp276, Centre for Business Research, University of Cambridge.
    19. Mark E. Doms & J . Bradford Jensen, 1998. "Comparing Wages, Skills, and Productivity between Domestically and Foreign-Owned Manufacturing Establishments in the United States," NBER Chapters, in: Geography and Ownership as Bases for Economic Accounting, pages 235-258, National Bureau of Economic Research, Inc.
    20. Akhigbe, Aigbe & Martin, Anna D., 2000. "Information-signaling and competitive effects of foreign acquisitions in the US," Journal of Banking & Finance, Elsevier, vol. 24(8), pages 1307-1321, August.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    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:nbr:nberwo:3737. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/nberrus.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.