Research Issues in Japanese Foreign Direct Investment

Abstract

Since the mid-1980s Japan has been one of the world's leading sources of foreign direct investment (FDI) reflecting the continuing internationalisation of Japanese corporations. This paper provides a broad survey of trends in Japanese FDI in the postwar period and considers its motivations and determinants in the economic literature. One problem that emerges is that the underlying statistical database often limits an explanation of the industrial and geographical distribution of Japanese FDI. While the Ministry of Finance statistical series on Japanese FDI is the most commonly used data source, detailed information on investment by industry and country has not been easily available for long time periods or even particular years. The author has assembled a broad ranging collection of MOF statistics on FDI and examines the potential for using this resource to better understand the reasons for Japanese investment. A case study of Japanese real estate FDI is used to illustrate the research possibilities opened up by this approach.