Foreign direct investment in Japan

Foreign Direct Investment in Japan is the first serious and comprehensive examination of why the direct participation of foreign firms in the economy of Japan is lower than in any other advanced industrial nation. An internationally acclaimed group of scholars and practitioners addresses this problem and considers what policy actions, if any, the Japanese government can take to increase direct investment. Foreign exchange controls banned direct investment into Japan until the late 1970s and this is still partially responsible for the low penetration of foreign firms. A fundamental question addressed by the book is whether or not ownership advantages in technology and management know-how possessed by foreign firms are strong enough to overcome the extra costs of doing business in Japan. Such extra costs or locational disadvantages include very high land and labour costs as well as business practices unique to Japan, characterized by the long-term customized transaction relationship among assemblers, component suppliers, distributors and financial institutions and the long-time employment system. Although the Government of Japan desires to invite more foreign firms, this book demonst