Foreign Direct Investment in Japan

Multinationals' Role in Growth and Globalization

Foreign Direct Investment in Japan

Foreign Direct Investment in Japan presents a detailed examination of recent trends of inward foreign direct investment (FDI) and their impact on the Japanese economy. Historically much less open to foreign trade and investment than other major economies, Japan experienced an unprecedented jump in FDI inflows around the turn of the millennium. This book looks at the profound changes in Japan that made this jump possible and considers foreign firms’ potential contribution to productivity and overall economic growth. Detailed case studies illustrate that in certain sectors the presence of foreign firms already is a key factor shaping industry dynamics. Yet, despite recent changes, resistance to inward FDI remains strong and the government could do much more if it were committed to attracting FDI. Overall, Japan continues to appear reluctant to embrace fully, and therefore seems unlikely to benefit even more substantially from, globalization.


“This book makes a substantial contribution to the literature on foreign investment in Japan and foreign investment in the era of globalization. It analyzes the recent surge of FDI into Japan, its concentration in particular sectors like automobiles, finance and insurance, and its impact on the efficiency with which the Japanese economy operates. This last step is of broad policy interest because it underlines the role that openness to new entrants, including and importantly foreign investors in advanced economies, plays in enhancing productivity performance and competitiveness and establishes that role convincingly in the case of Japan.”
Peter Drysdale, The Australian National University

“Paprzycki and Fukao provide a complete account of FDI in Japan, chronicling the early impediments to investing into Japan and identifying the productivity benefits the recent surge in investment has brought. The authors bring the latest and most accurate data and analysis to bear. Insights are based on economic data and methods, complemented by rich case studies. Researchers interested in the effects and prospects for FDI in Japan--or any other country for that matter--should read this book.”
Keith Head, University of British Columbia

“This book is the first rigorous academic work to investigate one of the biggest enigmas in the world, namely, foreign direct investment (FDI) in Japan. The authority on the subject Professor Fukao and a young versatile scholar apply multiple empirical approaches to the unsatisfactory status of FDI in Japan as well as its actual and potential growth contribution.”
Fuku Kimura, Keio University

“This is a good addition to the research on the Japanese economy and the changes that have taken place over the last 15 years. Paprzycki and Fukao (both, Hitotsubashi Univ., Japan) provide significant detail on the level of, and changes in, foreign direct investment (FDI) in Japan, as well as an analysis of why inward FDI was so low in the past and the effects of the recent surge in inward FDI on the economy.”

"Overall, this book is an outstanding contribution in understanding the FDI in Japan. The book does an excellent job in linking the micro- and macro-economic aspects of inward FDI. The policy implications of this paper are convincing because they are drawn from several micro-economic evidences, consisting of statistical and case studies. The authors overcome the difficulty of the limited availability of the FDI data in Japan. While the book will be of special interest to people in policy circles, anyone interested in the activity of foreign firms in Japan will benefit from this book." - Pacific Affairs

"Clearly written and organised … this book offers an excellent view of FDI in Japan."
The Journal of Asian Studies

"[This is] partly an enjoyable survey of exciting new developments in systems biology, valuable to any student of biology or science, and partly a bold blueprint for how we might preserve our future on Earth using the systems perspective on life and what sustains it … this is a book of ideas and argument … Capra and Luisi take an adventurous expedition through topics from genetic regulation to ecology, and from climate science to the origins of life, in every case emphasising the necessity of taking a holistic perspective if we are to make progress."
New Scientist