Japanese Foreign Direct Investment

49 Pages Posted: 14 Jul 2000 Last revised: 20 Mar 2022

See all articles by Kenneth Froot

Kenneth Froot

Harvard University Graduate School of Business; National Bureau of Economic Research (NBER)

Date Written: June 1991

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

Froot, Kenneth, Japanese Foreign Direct Investment (June 1991). NBER Working Paper No. w3737, Available at SSRN: https://ssrn.com/abstract=226926

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