Foreign Direct Investment in Japan: Multinationals' Role in Growth and Globalization

Description

Foreign Direct Investment in Japan presents a detailed examination of trends of inward foreign direct investment (FDI) and their impact on the Japanese economy. Historically much less open to foreign trade and investment than other major economies, Japan experienced an unprecedented jump in FDI inflows around the turn of the millennium. This book looks at the profound changes in Japan that made this jump possible and considers foreign firms' potential contribution to productivity and overall economic growth. Detailed case studies illustrate that in certain sectors the presence of foreign firms already is a key factor shaping industry dynamics. Yet, despite recent changes, resistance to inward FDI remains strong and the government could do much more if it were committed to attracting FDI. Overall, Japan continues to appear reluctant to embrace fully, and therefore seems unlikely to benefit even more substantially from, globalization.

Ralph Paprzycki is a Research Fellow at the Institute of Economic Research, Hitotsubashi University, Tokyo, Japan. He has also taught at Sophia University in Tokyo. Dr Paprzycki's book Interfirm Networks in the Japanese Electronics Industry was published in 2005. He obtained his doctorate in economics from the London School of Oriental and Asian Studies. Kyoji Fukao is Professor and Director of the Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University, Tokyo, Japan. A former Councillor of Hitotsubashi University, he has also served as a Faculty Fellow of the Research Institute of Economy, Trade and Industry in Japan since 2001 and Chief Research Fellow in the Asian Study Division of the Japan Center of Economic Research since 2004. Professor Fukao coauthored Foreign Direct Investment and the Japanese Economy with Tomofumi Amano in 2004 and has published articles in journals such as the Quarterly Journal of Economics, Journal of Political Economy, Journal of the Asia Pacific Economy, and the Journal of the Japanese and International Economies.

'This book makes a substantial contribution to the literature on foreign investment in Japan and foreign investment in the era of globalization. It analyzes the recent surge of FDI into Japan, its concentration in particular sectors like automobiles, finance and insurance, and its impact on the efficiency with which the Japanese economy operates. This last step is of broad policy interest because it underlines the role that openness to new entrants, including and importantly foreign investors in advanced economies, plays in enhancing productivity performance and competitiveness and establishes that role convincingly in the case of Japan.' Peter Drysdale, The Australian National University 'Paprzycki and Fukao provide a complete account of FDI in Japan, chronicling the early impediments to investing into Japan and identifying the productivity benefits the recent surge in investment has brought. The authors bring the latest and most accurate data and analysis to bear. Insights are based on economic data and methods, complemented by rich case studies. Researchers interested in the effects and prospects for FDI in Japan - or any other country for that matter - should read this book.' Keith Head, University of British Columbia 'This book is the first rigorous academic work to investigate one of the biggest enigmas in the world, namely, foreign direct investment (FDI) in Japan. The authority on the subject Professor Fukao and a young versatile scholar apply multiple empirical approaches to the unsatisfactory status of FDI in Japan as well as its actual and potential growth contribution.' Fuku Kimura, Keio University