What Caused the Recent Surge of FDI into Japan?
Hi-Stat Discussion Paper No. 31
28 Pages Posted: 28 Feb 2006
Date Written: April 2004
In recent years, foreign direct investment (FDI) in Japan has jumped to unprecedented levels. This paper examines the underlying reasons, looking at both the international factors - the global boom in FDI and mergers & acquisitions(M&A) during 1998-2000 - and domestic regulatory, structural and other changes. It is argued that while domestic changes created the necessary conditions for Japan to participate in the global M&A boom, FDI inflows failed to develop a momentum of their own. Thus, rather than the result of a sudden transformation of the country into a major destination for global FDI flows, the recent surge in Japan was primarily driven by global trends.
Keywords: Japan, foreign direct investment, structural change, policy
JEL Classification: F00, F20, F22, F23
Suggested Citation: Suggested Citation