JAPANESE FDI
In the era of globalization, international trade and international investments are expanding at exponential rates. Almost all developed countries are involved in Foreign Direct Investment processes, both in the form of outward and inward FDI. Among those developed countries there is the case of Japan that is different; Japanese attitude towards FDI has always been, in fact, very cautious. One one hand, Japanese outward foreign investment and exports have played a fundamental role in the postwar period of economic rise; on the other hand, the accesses to the domestic market by foreign investors, the so called Inward FDI, has been very limited. (Paprzycki, Fukao, 2008).
Japan is a highly industrialised country, it has a large-sized market, its labour force is very well-educated and the political situation is much more stable than almost all other East asian countries, then why is inward foreign direct investment rate so small in Japan? ( Frank, 1975).
As a study of Hara and Razafimahefa (2003) highlights: “in 1999, inward FDI amounted to 0.7% of the GDP whereas the ratio reached 9.3%, 9.5%, 11.7% and 23.3% for Germany, The United States, France and England, respectively”.
Even if the level of inward FDI is still very low, from the second half of 1990 its level is steadily increased; it's passed, in fact, from 3,837 millions US$ to 28,276 millions US$ in 2000. (Hara, Razafimahefa, 2003). Japanese government has promoted some policies to help Inward FDI to rise such as a new legislation facilitating the acquistion of Japanese firms by foreign Companies and the creation of the Japanese External Trade Organisation (JETRO) (Head, Ries, 2005). By analysing the attitude of Japanese government towards inward FDI, it can be no...
... middle of paper ...
...m that permitted to use stock instead of cash, and the Improvement of legal procedures for the creation of a M&A activity. (Arikawa, Miyajima, 2007).
Despite all these government regulations and laws helping inward FDI; in the early 90s the inward flow of investment has not grow substantially. The major growth has been between 1998 and 1999 and since 2000 is still growing steadily. Yet, the inward flow of foreign investment is clearly much lower than the outward flow and, although the steady growth during last years, the ratio of inward FDI to GDP remains very low compared to almost all other industrialised countries. The action of the government towards the promotion of inward investment is still strong, in fact, in 2003 established the Invest Japan Office within the JETRO and other measures concerning the elimination of barriers are still in place. (Suginohara)
This term paper will discuss information about the console maker and video gaming industry giant Nintendo Co., Ltd. Information such as a brief history from conception to present, the many products produced and size of the company will be covered as well as where the company has subsidiaries. This paper will briefly discuss the political and economic system employed in Japan and the influence the government has on the nation’s economy. This paper will discuss the influence of Japanese culture and problems a new comer would face trying to compete in a world dominated by Nintendo Co., Ltd. Since the early 1990’s, the Foreign Direct Investment has impacted many companies around the world and this paper will discuss what the impact has been for Nintendo Co., Ltd and Japan. This paper will briefly discuss the regional economic integration and the effects that have been felt by Nintendo Co., Ltd and Japan. The government’s strategy for influencing trade and trade controls that Japan has developed will be covered in this paper. This paper will discuss what Nintendo Co., Ltd has in store for the company’s international expansion strategy. This paper will briefly discuss the philosophy Nintendo Co., Ltd will need to maintain its competitive edge in the video gaming industry.
To begin with, this research exposed a FDI puzzle between India and China through analyzing the current economic condition. Prime, Subrahmanyam and Lin (2011) stated, "Given their growth records, large markets, and reformed economic systems, both China and India appear to be equally likely candidates for foreign direct investment. Yet, China has received substantially more FDI" (p. 303).
Government administration says its plans to cut the corporate tax rate to levels common in many European and Asian economies will help attract more foreign direct investments in Japan, while persuading Japanese firms to invest more domestically. But what will count in attracting more foreign investments in Japan will be the effort to make the market here more attractive. One avenue of such effort lies in free-trade agreements which, by expanding regional trade and increasing inward investments, can drive up the nation’s growth potential. The Japanese government’s program for promoting imports and investment takes the form of discounts and tax reductions, loan guarantees, and loans at reduced rates. It also takes the form of assistance for foreign exporters wishing to import into Japan. Reasons a country should choose to invest in Japan include: being the third largest economy, having one of the highest purchasing power in the world, being a leader in high technology and R&D, and entering the Japanese market facilitates entrance to other Asian
Inflation increased from 19.91% in 1995 to 26.4% in 1996 before dramatically decreasing to 9.67% in 1997 and hitting a nearly twenty year low of 5.95% in 1999 (See Appendix B). Foreign direct investment inflows continually increased from 1996 to 1999 (See Appendix C). Alternatively, foreign direct investment outflows decreased from $45.3 million in 1996 to $9 million in 1997, but saw a steep increase of 389% to $35M in 1998 and 76% increase to $45.9M in 1999 (See Appendix D). (World
Flow of money for the purpose of investments from one country to another country is called as Foreign Direct Investments. It is an investment made by a company based in one country for long lasting interest or controlling stake into a company in a foreign country. The nature of FDI could be either be inward or outward. Inward FDI refers to direct investments flowing into the home country from foreign land, and outward FDI refers to home country making direct investments in foreign land. The difference between inward FDI and outward FDI is net FDI inflow. Net FDI inflow could be either positive or negative based on the investments flowing between countries.
C/E/110. FDI in emerging economies: the case of EECThe paper discusses the importance of inbound FDI for emerging economies. Among the considered benefits are economic growth, the growth of internal market, technological sipll -overs and access to cheap managerial know-how. The paper also considers the motivational forces that push and pull investors to stream their capitals into particular destinations and business areas.
I found this article "Foreign direct investment: Companies rush in with the cash" on the financial times website (www.FT.com) published December 11, 2002 written by John Thornhill. The reason for choosing this article is my personal interest in the Chinese economy and its attractiveness to the foreign investors. Apart from the foreign direct investment this topic has also helped me in understanding the impact of Chinese economy on the global market.
Japan is one of the world’s leading trading nations, as measured by their exports. Its imports and exports totaled about $525 billion in 1990. Their main exports at the time, in terms of value, were iron and steel, passenger cars and electronic equipment. Petroleum was Japan’s chief import that accounted for 35 per cent of the total value of imports (World Book). Most of the time since the mid-1960s, Japan has had a favorable balance of trade-that is, the value of its exports has exceed the value of its imports. Japan maintained a favorable balance of trade by one, exporting manufactured products throughout the world at competitive prices and second, through restricting imports by means of various trade barriers, such as tariffs and quotas. Japan’s trade policies have contributed to unfavorable trade balances for countries that import large qualities of Japanese goods but face barriers to exporting their own goods to Japan. In an effort to reduce these barriers, a number of Japan’s trading partners began criticizing the country’s trade practices. To maintain good trade relations, Japan begun responding to these request. It reduced its exports of automobiles to the United States. It also relaxed restrictions on imports of U.S. food products, but U.S. officials still criticize the serious trade imbalance that remain in Japans favor. However, over the past five years from current date, Japan has shifted their ideology by seeking free trade agreements (FTA) with a number of countries. In doing so, Japan hopes to revitalize its economy as well as to compete with other major countries, like China for influence in Asia.
In September 22, 1985, government of the United States, France, West Germany, Japan, and United Kingdom meet at Plaza Hotel in New York (Okina). The five governments come to an agreement call Plaza Agreement. Governments agree to change the exchange rate of U.S. Dollar. The exchange value of dollar decline and Yen go up (Okina). Due to the Plaza Agreement, much U.S. money started to flow to Japan. During 1985 to 1988, the Yen exchange rate increase and this decrease the competitive strength of Japanese international company (Okina). The Japanese government created policies to help the export industries that were hurt by the inflation of Yen. Interest rate of loaning was reducing to policy that created (Okina). The lower of interest rate did not help the export businesses, but it trigger an investment boom in Japan. Investment toward stock and real estate were rapidly increasing due to the belief that land would not depreciate (Okina). As more land being trade the price of lands started to increase. At the highest point of the price, Tokyo’s land value can compare to the land value ...
Mauritius is largest investor in India followed by United States and United Kingdom and investment of these countries primarily concentrated on power, energy, telecom, services and transportation sector. Japan is the fourth largest investor in India. Investment of Japan in India has increased during 2008. Japan had 838 business establishments whereas in 2012 it has 1804 business establishments. Out of these 1804 business establishments 926 are registered companies. North region of India has highest number of companies which are 613 in number followed by southern India (489) and western region has about 365 companies. The major sector which attracting Japanese Foreign Direct Investment in India are: - Drugs, automobiles, service sector and electrical industry. Drugs sector attracts almost 30.86 percent of Japanese Foreign Direct Investment in India whereas automobile has second place with 14.96 percent and service sector attract almost 14.03 percent of Japanese Foreign Direct Investment in
During the 1990s, Japan has been exposed to one of the most difficult structural transition periods in its post-war history, in terms of social and economic conditions. There have been two major changes: one is a substantial decline in economic growth in real terms, and the other is a changing social structure characterized by the declining birth rate and the ageing population. Under the pressure of changes in the economic environment caused by globalization and innovations in information technology, Japanese business corporations are forced to adapt to the new situation. While companies faced with fierce international competition, it became more critical to understand the basic knowledge of complicated legal, cultural, economic, and social issues. Engaging in international trade also requires attention to international regulations, international business planning, international market research, funding, distribution and other areas that must be considered separately from domestic business issues. The paper suggests some of the basic tools that can apply to solve the problem or to bring the business opportunity to fruition in today's Japanese business environment
A benefit of Japanese having a grantor FDI includes bring competition to Japan were local ones may not already be experiencing it. This could source new management ideas, business policies, and technology; all of which could boost productivity. It was the opportunity to help restructure Japan’s retail sector that would boost productivity, gaining market share, and profiting from the process. This attracted the worlds largest retailer to
The 127 mln. people of Japan are heavily concentrated in the coastal areas and urban regions because of the mountainous nature of the country. Half of the population lives in and around the three main metropolitan areas of Tokyo, Osaka, and Nagoya. At the end of 1980s Japan could be characterized as atrong country in political, social, culturally ,conservative, and homogenous ways. During the next few dozens of years it’s continued to grow in all dimensions. To analyze the current dynamics which cause changes in the Japanese market, its firms, and its managers we should look through its political and social basis.
Japan, home of some of the largest multinational technology corporations in the world, has been influenced in myriad ways through globalization. The effects of globalization on Japan provide valuable insights into the transformation of Japanese society. Global processes have increased wages and homelessness, strengthened environmental management programs, shifted governance towards regionalism, and threatened linguistic diversity in Japan.
Sukar, A., Ahmed, S., & Hassan, S. (n.d.). THE EFFECTS OF FOREIGN DIRECT INVESTMENT ON ECONOMIC GROWTH. Southwestern Economic Review.