Determinants of Japanese FDI Flows

Abstract

Japanese FDI outflows are distributed globally in a very uneven manner with a handful of countries receiving the bulk — and the Asian countries are no exception (chapter 2). Even though the pattern of FDI distribution has changed over the decades, with some countries gaining at the expense of others, the pattern of distribution continues to be concentrated. However, its impressive growth in the East Asian countries and China has generated a lot of debate about the major determinants of these flows and the country-specific location advantages that these economies enjoy in providing motivation and opportunities for the activities of Japanese MNEs. Even though these countries are geographically close, and having almost similar development trajectories and the regional integration is encouraging the expansion of their market network yet their economic characterization in attracting Japanese FDI greatly differs from one another, leading to wide differences in the scale of Japanese FDI flows both within and between NIEs, ASEAN, China and India throughout this period.