Determinants of Japans foreign direct investment: An industry and country panel study, 1984-1998

Roger Farrell, Noel Gaston, Jan-Egbert Sturm

    Research output: Contribution to journalArticle

    Abstract

    From the time of the Plaza Accord until the late-1990s, Japanese foreign direct investment (JFDI) successively rose dramatically, fell sharply and recovered slowly. Using panel data for 8 manufacturing industries and 15 countries, we find that JFDI was primarily affected by domestic macroeconomic conditions and the increasing use of antidumping investigations by host countries. In addition, we find that the precise relationship between exports and JFDI depends on the industry and country in question. Finally, there is a robust positive relationship between imports and JFDI. While this may result from stable intra-keiretsu relationships, it may also be, in part, that JFDI represents the outsourcing of relatively low technology production processes.
    Original languageEnglish
    Pages (from-to)161-182
    JournalJournal of the Japanese and International Economies
    Volume18
    Issue number2
    DOIs
    Publication statusPublished - 2004

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