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The Local Economy: Lessons from Japan

  • Rika Nakagawa
Part of the IDE-JETRO Series book series (IDE)

Abstract

Since the Plaza Accords in 1985, many Japanese manufacturing companies have moved production bases from Japan to overseas, such as Southeast Asia and East Asia. One reason for this was that the Plaza Accords caused the Japanese currency to appreciate sharply. This currency appreciation resulted in an increase of production costs at home. In order for Japanese manufacturing firms to compete with other companies in global markets, they needed to reduce production costs. On the other hand, Southeast and East Asian developing countries need foreign direct investment (FDI) for their economic development. Therefore, governments of those countries implemented several policies in order to invite manufacturing firms from developed countries. As a result, a large number of manufacturing firms moved their production facilities from Japan to developing countries in Southeast and East Asia. In the late 1990s, Japanese manufacturing companies began to invest in factories or offices in China owing to low production costs.

Keywords

Local Government Foreign Direct Investment Central Government Capita Income Local Economy 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Copyright information

© Institute of Developing Economies (IDE),JETRO 2005

Authors and Affiliations

  • Rika Nakagawa

There are no affiliations available

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