Investment strategies of Japanese firms in the new federal states (former GDR)

Abstract

Introduction The opening of the eastern European countries and the come down of the Berlin Wall* with the following unification of Germany? exhibited new economic perspectives. Due to the political changes, access to undeveloped new markets was offered. We were interested in how Japanese companies reacted towards these changes and whether they showed a special interest in the new federal states (Fig. I). Normally, when conquering new markets, Japanese companies started by setting up representative offices and networks for distribution and sales and services. Later on, production facilities followed. Their investment strategy was charactcrizcd by long-term thinking and the striving to be close to local markets. The first section will summarize the past Japanese foreign direct investment (FDI) strategy, while the second section will present a short introduction to the Japanese way of thinking. The third section will give an answer to the question why the new federal states could be interesting for Japanese firms. The fourth section will list the investments of Japanese firms in the new federal states so far. The results from the questionnaire will sustain the impression that the Japanese community has been reluctant to invest in the new federal states so far. The fifth section will elaborate the reasons why Japanese firms have been hesitant to invest in the new federal states. In particular, results from the survey will support the findings. The sixth section will name numerous activities by the government, the Treuhand, and other organizations to promote investment in the new federal states. Due to the characteristics of past Japanese investment strategies. we expected the Japanese to show a special interest in the new federal states. Among other things, the paper seeks to elaborate the subject with the empirical tool of a questionnaire. The questionnaire was divided into three parts. Part one asked about general information on the companies such as the branch of industry, the number of employees and the products. Part two was for companies which had already invested in the new federal states, and it Investment Strategies