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...
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...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)
“By 1870, 90% of Japan’s international trade was controlled by Westerners living in Japan.” (Woods, SW. (2004). Japan an Illustrated History (1st Edition). Hippocrene books pg. 111).
Zheng, P. (2009). A comparison of FDI determinants in China and India. Thunderbird International Business Review, 51(3), 263-279. doi:10.1002/tie.20264
"Timeline." NYSE, New York Stock Exchange About Us History 2008 Specialists Are Transformed into Designated Market Makers (DMMs). N.p., n.d. Web. 29 Mar. 2014. .
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Most American citizens remember December 7, 1941 and the significance that the incidents of that day had. The attack on Pearl Harbor was a shock to the United States of America and it engaged our country in the Second World War of that century (Pearl, 2009). Unfortunately, due to that incident, many Americans harbor many negative feelings and attitudes towards the country of Japan. While this is an understandable sentiment, it is unnecessary, because Japan is an influence on not on the United States but the entire world. Throughout this paper, we will look at the country of Japan as many have never viewed them before. Their actions of the past are just that, the past. Japan is a thriving and successful country within our environment and it is in our best interest to understand that country better. Japan, as a culture, is the
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
In the late nineteenth century, Japan’s economy began to grow and industrialize. Because of the scarcity of natural resources in Japan, they relied on imported materials from other countries. In September 1940, the United States placed an embargo on Japan by outlawing exports of steel, iron, and aviation fuel, because Japan took over north...
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
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.
Political and legal considerations were given first priority in this analysis with primary emphasis given to whether a country's legal or political system prohibits or impedes foreign investment. If a country's political or legal system discouraged or prevented foreign investment, that country was disqualified from further consideration. Factors considered when assessing the political and legal environment:
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
and denial on some others for example: the way Japan will only let certain foreign cars into Japan and even then they are so heavily taxed that they are The average Japanese person cann't pay that much and will have to buy a Japanese made car and at the same time in other countries they are selling their cars for less. than anyone else in that country and that is what they do with most of their products and is how they get trade surplus year after year. & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; Manufacturing is the most important economic activity in Japan. accounts for about 28% of its GDP. The Japanese people import more than half.
In the following essay I will try to compare two highly developed economies, Japan and The United Kingdom. I will emphasize the success of their economies and how human capital, advancing technology (innovation), and FDI have contributed to their current success or failure. I will briefly discuss the contemporary history of each country, thoroughly cover their current conditions, and end with expectations for their future.
Japan has very significant characteristics in terms of their economic power either in the Asia- Pacific region or around the world. After World War II the Japanese economy was deeply affected by shortages, inflation, and currency devaluation means that Japanese economy was bankrupt position. Therefore, Japan passed under the control of US in the post- Second World War period. From this point, economic transformation or recovery or development has started in Japan with the impacts of US and Japanese governments. Besides this economic aid, US also guided Japan in democratization and demilitarization whereas Japanese government had direct role dealing with those developments different from what happened in Germany at that time. What it means that is Japanese government had played interventionist role into economy. On the other hand, one of the significant reasons of why US needed to help former enemy is the fact that after the WWII was the beginning of the Cold War and Russian presence was in the region. That’s why US made their contribution in order to revive Japan.
Sukar, A., Ahmed, S., & Hassan, S. (n.d.). THE EFFECTS OF FOREIGN DIRECT INVESTMENT ON ECONOMIC GROWTH. Southwestern Economic Review.