Japanese Direct Investment in the Peripheral Regions of Europe: An Overview

Abstract

Japanese foreign direct investment (FDI) has expanded rapidly in the 1980s and early 1990s, with the stock of investment totalling $US387 billion as of 1992. Japanese FDI has been targeted largely towards the US, the core of the European Union and South-East Asian countries. Overall, investment from Japan in the peripheral regions of Europe (PRE) has been limited in size. Of this limited investment directed towards the peripheries of Europe, there are only a few projects which are large-scale. This may well be a natural consequence of very limited economic relationships and the great distances between these countries and Japan. To Japanese firms, the US and, to a lesser extent, Europe have been the largest market in most key industries. Furthermore, for Japanese big business, South-East Asian countries have for some considerable time been important markets and sources of supply for natural resources and labour-intensive manufactures.