Essay about Japanese Foreign Direct Investment (FDI)

The main challenge about trade is the long-term condition of Japan. Although Japan performs well now, it is a receding market. There is a significant challenge for Japan in the future. It is facing a dwindling work population, as the average populace gets older. This provides a serious risk as if the workforce reduces in size so does the production. And production is one of the main factors that make Japan wealthy. In addition, even though it is the second largest economy in the world it will face high expenditure. This is a serious issue if not properly taken care of. However, a country with one of the highest GDP’s in the world is unlikely to mistreat

Its actions have helped initiate new industries, cushion the effects of economic depression, create a sound economic infrastructure, and protect the living standards of the citizenry. Indeed, so pervasive has government influence in the economy seemed that many foreign observers have popularized the term "Japan Inc." to describe its alliance of business and government interests. Whether Japan in the mid-1990s fit this picture seems questionable, but there is little doubt that government agencies continue to influence the economy through a variety of policies. Not only did the American press use the same terms as the federal government, but in doing so it also helped lay the framework of the Japanese- American internment in a completely inaccurate way (Lau, 2014).

What impact will the prospect of deprivatization have on investment by managers of privatized firms?

This Case study provides an insight to the fluctuations experienced in the currency of Japan, Yen from the late 1990’s to recent years. Japan follows the floating currency monetary policy due to which there is no measures taken on to control the fluctuations. Japan experienced magnificent growth through the 60's, 70's, and 80's leading into the 90's beginning. In the late 1990's, Japan’s economy marked its growth significantly slower, which had then come to be known as the 'lost decade' due to Japanese Asset Price bubble that collapsed. Eventually the nation faced major issues regarding

Specifically, this work takes a glimpse into the culture of Japan as it relates to certain aspects that greatly effect international business. Secondly, there will be a discussion of how Japan is conducting its business internationally and how aspects of Japanese culture lead to either their success or failure on the international business stage. Thirdly, there will be a comparison as to how the cultural differences between Japan and the United States can be a barrier to successful trade and business and specific items that companies from the United States need to keep in mind when conducting business in Japan. Fourthly, there will be an examination of special considerations to keep in mind when conducting

As the primary government agency in charge of formulating and executing industrial policy, MITI played an important role in creating the economic miracle by shifting resource to specific industries at the right time. Before the capital liberalization of the late 1960s and 1970s, neither importation of foreign technology nor joint venture was approved without MITI and its various advisory committees’ consensus. Even the time of importation of technology was also strictly controlled in the hand of MITI in order to ensure that the technology was nurturing to the industry and consequently boost the economy. Furthermore, the government-controlled financial institutions like the Japanese Development Bank and the government-run postal savings system also played an important role in the economic miracle by the means of controlling the capital investment to the strategic industries in accordance with government plans. Thus, it is no doubt that Japan’s government, especially through MITI, had exercised a considerable degree of state intervention and protection on its economy to achieve the national goals and therefore lead to the economic

Since the Second World War, the Japanese economy had experienced remarkable growth, transforming from a developing to an advanced developed economy in a single generation. However, on the edge of a three-decade long “Economic Miracle,” in the late 1980s, Japan faced its regrettable “bubble economy” in which asset prices rapidly soared, money supply and credit underwent sizable increase, and economic activity overheated for a prolonged period (Okina p.396). At the bubble’s peak in 1989, the Japanese stock market obtained a value of around $4 trillion, reaching the benchmark Nikkei 225 stock average of ¥38,915 (four times the level they had been in 1983) (Siebert p.9). This was approximately 44 percent of the world’s equity market capitalization (Stone p.149). At around similar time frame, Japan also saw a spectacular surge in land prices with the land values five times that of the United States (Stone p.149). Hence, during this time, the economy relished an investment and consumption boom to the extent that Japan rapidly became known as the world’s largest creditor country. However, such record growth fell drastically with the burst of the bubble: the stock market plummeted by over 60 percent from its peak in 1989 to 1992 while speculative land prices fell over 50 percent and essential land prices declined by about 15 to 20 percent (Okina p.397). Overall, the bursting of the bubble resulted in a detrimental decline in asset prices, the accumulation of enormous

Was the strategy that was changed to industry thought out for the nation’s economy? Why were the open system and the various policies for their investment and finance found under any ‘great cause’? Furthermore, how did Yokoi’s alternative policy thought, which varied between ‘belief’ and ‘an increase in profits’, develop ‘the opening up of Japan’ from’ the public way of the world’, acknowledging the reciprocal interests of

Japan ranks as the third largest economy in the world as of 2010. The GDP at current prices in US dollars in Japan was reported at 5068.06 billion in 2009, according to the International Monetary Fund (IMF). Japan’s resurgence after World War II has however reached an inflection point in yearly 1989 after the burst of Japan’s asset price and real estate bubbles. As can be seen from the graph below, Japan’s GDP has hovered around the same level through more than 20 years of economic stagnation. The GDP’s slow growth has been exacerbated by the world financial crisis of 2008. A major landmark of Japan’s stagnation has been the BOJ’s fight against deflation.

The deregulation of financial markets catalysed by Globalisation worldwide has impacted on the amount of trade within the Japanese economy beneficially allowing easier access to foreign currencies, facilitating a higher flow of goods between nation, by relaxing laws that severely prevented foreign buying of currency, and floating the yen. These drivers have helped boost Japan's trade and recovery from its recession. Technology has allowed finances to be traded and communication to be near to instantaneous. This has increased dramatically the amount of FDI into Japan largely thanks to the numerous strategies the Japanese government has taken to promote economic growth and hence development. Finance and Foreign Direct Investment (FDI) have increased as a direct result of globalisation doubling from $63 billion in 2001 to $144 billion in

Since the post-war economic miracle Japan has heavily relied on its distinctive corporate business system with JOHN stating that it ‘has been widely praised for its massive contribution to Japan’s strong economic growth.’ JOHN argues that the key to this business

Investment led growth, meaning, not export led, is what really pushed Japan’s progress. Both big and small businesses around Japan used their new found specializations to invested in the government and the country. “Rising domestic savings made increasing capital accumulation possible” (Mosk 2004). At this point, with their

In Indian context, the importance of FDI was realized way back in 1948 when emphasis was given on creating domestic base. However, since access to finance was quite limited, the attitude towards FDI was receptive (Kumar, 2004). Since then there was a debate over the necessity of FDI and Government of India in the 1980s cautiously went on deregulation of industries. However, after the adoption of liberal investment policy under economic reforms in 1991 resulted in attraction of more FDI inflow to the country. In recent times, FDI inflow to India increased by 17.1 percent in 2005, which is 5.8 percent of GDP of the country.

Definition: An investment made by a company or entity based in one country, into a company or entity based in another country.

Europe is an important market for Japan with the EU both an important trading partner and destination for outbound FDI. The UK has traditionally attracted a major proportion of these FDI flows, positioning itself as the ‘Gateway’ for Europe. The Japanese ambassador estimates that there are now 10,000 Japanese firms operating in the UK, employing 140,000 people, with 440,000 people employed by Japanese firms in the EU as a whole. In 2014 net FDI from Japan into the UK was £2.2bn, close to 10% of total net FDI.