Foreign direct investment outflows in the forest products industry: the case of the United States and Japan

Abstract

SUMMARY This paper investigates the determinants of foreign direct investment (FDI) outflows from two major forest product importing countries: the U.S. and Japan. Exchange rate, per capita income, cost of capital, and cost of labour in host countries have significant impacts on the FDI outflows from these two countries. A complementary relationship is found between forest products exports and FDI outflows for the forest product importing countries. Market-seeking as well as resource-seeking motives for the FDI outflows from these countries are evident.