The Impact of Foreign Direct Investment in Japan: Case Studies of the Automobile, Finance, and Health Care Industries

Hi-Stat Discussion Paper No. 141

52 Pages Posted: 28 Feb 2006

See all articles by Ralph Paprzycki

Ralph Paprzycki

Hitotsubashi University - Institute of Economic Research

Date Written: February 2006

Abstract

Having historically received very little foreign direct investment, Japan has experienced a substantial increase in such inflows in recent years. This paper analyzes the impact of the growing presence of foreign firms on the Japanese economy through detailed case studies on the automobile, finance, and health care industries. The wholesale & retail and the telecommunications sector are also briefly examined. The case studies show that in the sectors considered, foreign firms in one way or another are contributing to a greater degree of competition, are exposing domestic firms to global best practice, and are increasing the range of products and services available in Japan. In many of the sectors, they are also contributing to changes in industry structure and employment practices. The case studies thus illustrate that foreign direct investment - even at its present levels, which, although large by Japanese standards, are still low in international comparison - can be an important catalyst for change and hence help to reinvigorate the Japanese economy.

Keywords: Japan, foreign direct investment, industry studies, automobiles, finance, insurance, pharmaceutical, health care

JEL Classification: F20, F21, F23, G21, G22, I11, L62, L65

Suggested Citation

Paprzycki, Ralph, The Impact of Foreign Direct Investment in Japan: Case Studies of the Automobile, Finance, and Health Care Industries (February 2006). Hi-Stat Discussion Paper No. 141, Available at SSRN: https://ssrn.com/abstract=886004 or http://dx.doi.org/10.2139/ssrn.886004

Ralph Paprzycki (Contact Author)

Hitotsubashi University - Institute of Economic Research ( email )

2-1 Naka Kunitachi-shi
Tokyo 186-8306
Japan

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