Foreign Direct Investment in Japan: Growth, Trends, and Policy Efforts

2020 ◽  
Author(s):  
Mark Manger
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Multinational Firms ◽  
International Investment ◽  
Foreign Firms ◽  
Free Standing ◽  
Policy Regime ◽  
Foreign Earnings ◽  
Official Policy ◽  
Japanese Fdi

For decades, Japanese outward foreign direct investment has exceeded the flow of foreign capital into the country. Policies and regulations restricted inward investment, while the foreign earnings of Japanese companies were recycled into investment abroad. Today, official policy has reversed to try to encourage greater inflows, but Japan does not attract much FDI. Following an overview of the trends of Japanese FDI, this chapter surveys the considerable official efforts to protect the interests of Japanese multinational firms abroad, particularly in the form of investment chapters in trade agreements and free-standing international investment agreements. It then analyzes recent attempts at reducing barriers to inward investment in Japan under Abenomics. Much suggests that these efforts do not spur on significant inflows. The conundrum of the Japanese government may be that the policy regime cannot by itself counter the diminishing economic attractiveness of Japan for foreign firms.

Does foreign direct investment spillover total factor productivity growth? A study of Indian drugs and pharmaceutical industry

2017 ◽  
Vol 24 (7) ◽  
pp. 1937-1955 ◽  
Author(s):  
Nitin Arora ◽  
Preeti Lohani
Keyword(s):  
Foreign Direct Investment ◽  
Pharmaceutical Industry ◽  
Total Factor Productivity ◽  
Direct Investment ◽  
Spillover Effect ◽  
Foreign Firms ◽  
Factor Productivity ◽  
Content Type ◽  
Domestic Firms ◽  
Tfp Growth

Purpose Foreign firms have certain advantages which may spillover to domestic firms in the form of improvements in total factor productivity (TFP) growth. The purpose of this paper is to empirically observe the presence of TFP spillovers of foreign direct investment (FDI) to domestic firms through analyzing source of TFP growth in Indian drugs and pharmaceutical industry. Design/methodology/approach This paper examines the sources of TFP spillovers of FDI in Indian drugs and pharmaceutical industry over the period 1999 to 2014. The data of 304 firms has been used for estimation of the growth rates of TFP and its sources under stochastic frontier analyses based Malmquist productivity index framework. For frontier estimation, the Wang and Ho (2010) model has been executed using translog form of production function. Findings The results show that there exists significant TFP spillover effect from the presence of foreign equity in drugs and pharmaceutical industry of India. The results also show that the major source of TFP fluctuations in the said industry is managerial efficiency that has been significantly affected by FDI spillover variables. In sum, the phenomenon of significant Intra-industry (horizontal) efficiency led productivity spillovers of FDI found valid in case of Indian drugs and pharmaceutical industry. Research limitations/implications The number of foreign firms is very less to imitate the significant impact of foreign investment on TFP growth of Indian pharmaceutical industry at aggregated level; and the Wang and Ho (2010) model is failing to capture direct impact of FDI on technological change under Malmquist framework. Practical implications Since, there exists dominance of domestic firms in Indian drugs and pharmaceutical industry, the planners should follow the policy which not only attract FDI but also benefit domestic firms; for example, developing modern infrastructure and institution which will further help domestic firms to absorb spillovers provided by the Multinational Corporations and also accelerate the growth and development of the economy. Social implications In no case, the foreign firms should dominate the market share otherwise the efficiency spillover effect will be negative and the domestic firms will be destroyed under the self-centric approach of foreign firms protected by the recent patent laws. Originality/value The study is a unique attempt to discuss the production structure and sources of TFP spillovers of FDI in Indian drugs and pharmaceutical industry with such a wide coverage of 304 firms over a period of 16 years under Wang and Ho (2010) model’s framework. The existing studies on TFP spillovers are using either a small sample size of firms or based upon traditional techniques of measuring spillover effects.

scholarly journals FEATURES OF GLOBAL INVESTMENT POLICY: MODERN TRENDS AND PROSPECTS

2019 ◽  
pp. 142-148
Author(s):  
Larisa Germanovna Chuvakhina
Keyword(s):  
Foreign Direct Investment ◽  
Foreign Investment ◽  
Direct Investment ◽  
World Economy ◽  
International Investment ◽  
Investment Policy ◽  
Investment Promotion ◽  
The Us ◽  
The World

The article highlights the current problems of investments in the development of the world economy, when international investment needs are significantly high. The priority is given to the issues of investment resources for achieving the goals of sustainable development of the world economy. It has been stated that for creating the effective economic policy, the countries need to attract foreign investment. The current trends in the development of global market for foreign direct investment flows are examined. The flows of global foreign direct investment in 2017-2018 are analyzed. Special attention is given to the study of the US investment policy. The reduction in US investments into the Russian economy in terms of the sanctions policy against Russia is marked. The changes in the investment policy of the administration of D. Trump in terms of strengthening American protectionism are underlined. The issues of US-EU investment cooperation are considered. The role of the US Federal Reserve in regulating the activities of foreign companies in the US market is defined. The main decisions taken at the X World Investment Forum of the United Nations Conference on Trade and Development in October, 2018 are considered. The role of investment promotion agencies is defined as one of the tools to attract foreign investments into the country's economy. The decrease in the level of international investment and increased competition between countries for attracting foreign investment is stated. The study confirms that the investment attractiveness of the country, stability of the national financial system, and legal security of business play a decisive role in attracting foreign direct investment.

scholarly journals Chinese Foreign Direct Investment and Human Rights in Kenya: A Mutually-Affirming Relationship?

2021 ◽  
Vol 2 (1) ◽  
pp. 133-154
Author(s):  
Rosemary Mwanza
Keyword(s):  
Human Rights ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
International Investment ◽  
Reciprocal Relationship ◽  
Human Rights Protection ◽  
Rights Protection ◽  
Investment Arbitration ◽  
Human Rights Norms ◽  
Chinese Foreign Direct Investment

Does the increase in Chinese foreign direct investment (FDI) inflows into Kenya portend doom for human rights in the country? The prominent narrative has been that FDI undermines human rights in host states, especially those in the developing world. This narrative is countered by claims that there exists a mutually affirming relationship between FDI and human rights. Proponents of this view posit that FDI facilitates the diffusion of human rights norms and correlates with the improved rule of law in host states. They also point to emerging human rights jurisprudence in international investment arbitration as evidence of a reciprocal relationship between FDI and human rights. In light of these arguments, this paper analyses the extent to which such a reciprocal relationship bears out between Chinese FDI and human rights in Kenya. It will be demonstrated that given the lack of a framework for human rights accountability for corporations at the international level, the restrictive treatment of human rights in international investment arbitration tribunals and weak institutional capacity in host states, a positive overlap between FDI and human rights is hardly a panacea for human rights protection in Kenya. Therefore, a synergy of legal measures and non-legal measures provide a pragmatic approach to insulate human rights from violations that may be associated with Chinese FDIs.

Foreign Direct Investment and the Flying Geese Model: Japanese Electronics Firms in Asia-Pacific

2000 ◽  
Vol 32 (2) ◽  
pp. 281-304 ◽  
Author(s):  
David W Edgington ◽  
Roger Hayter
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Asia Pacific ◽  
Critical Examination ◽  
Host Countries ◽  
Billiard Ball ◽  
Firm Level ◽  
Geographical Patterns ◽  
Japanese Fdi

This paper is a critical examination of the ‘flying geese’ and ‘billiard ball’ models of foreign direct investment (FDI) and their ability to explain the spatial expansion of Japanese electronics multinationals (MNCs) in Asia-Pacific countries from 1985 to 1996. Data on Japanese FDI are analyzed in this region at the aggregate, sectoral, and firm level. The paper commences with a review of the flying geese model, especially that version which interprets Japanese FDI as a catalyst for Asian development, and the billiard ball metaphor which suggests a mechanism for host countries to ‘catch up’ with Japan. The authors then turn to an analysis of Japanese FDI in Asia-Pacific together with employment data for fourteen major firms. This allows an evaluation of the two models in terms of recent geographical patterns of investment and employment growth by electronics MNCs. A special case study of Matsushita Electric Industrial Co. Ltd (MEI) helps flesh out the evolving geography of Japanese electronics firms in Asia-Pacific. Although the results support the overall patterns suggested by the two models, the authors argue that metaphors and analogies such as flying geese and billiard balls should not be used casually and as a substitute for analysis.

Exploring the Social Impact of Foreign Direct Investment on Institutional Change

2016 ◽  
pp. 198-214
Author(s):  
Natalya Smith ◽  
Ekaterina Thomas
Keyword(s):  
Foreign Direct Investment ◽  
Institutional Change ◽  
Direct Investment ◽  
Multinational Firms ◽  
Social Impact ◽  
Positive Impact ◽  
Social Significance ◽  
The Social ◽  
Negative Effect ◽  
Positive Direct

Despite the vast and growing literature on the economic impact of foreign direct investment (FDI), its social significance is somewhat a neglected issue. Focusing on Russia, this chapter examines the effect of FDI and (formal) institutions (proxied, alternatively, by the [1] accumulated stock of small and medium sized firms or SMEs and [2] number of economic crimes per 100,000 population or corruption) on (informal) institutional change (proxied by the change in the number of violent and property crimes per 100,000 population). The empirical findings provide robust support for a significantly positive direct impact of SMEs, whilst observing a significantly negative effect of corruption and either significantly positive impact of FDI or insignificant effect of multinational firms in this context.

scholarly journals Foreign Direct Investment and Productivity: A Cross-Country, Multisector Analysis

2019 ◽  
Vol 36 (1) ◽  
pp. 54-79 ◽  
Author(s):  
Rodolphe Desbordes ◽  
Loe Franssen
Keyword(s):  
Foreign Direct Investment ◽  
Labor Productivity ◽  
Direct Investment ◽  
Emerging Market ◽  
Export Performance ◽  
Foreign Firms ◽  
Factor Productivity ◽  
Foreign Markets ◽  
Cross Country ◽  
Positive Effect

This paper adopts a cross-country, multisector approach to investigate the intra- and inter-industry effects of foreign direct investment (FDI) on the productivity of 15 emerging market economies in 2000 and 2008. Our main finding is that intra-industry FDI has a large positive effect on total and “exported” labor productivity. The effects of FDI on total factor productivity are much more elusive, both in statistical and economic terms. This result suggests that foreign firms raise the performance of their host economies through a direct compositional effect. Foreign firms tend to be larger and more input intensive and have greater access to foreign markets than domestic firms. Their greater prevalence mechanically increases average labor productivity and export performance.

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