Title: The handmaiden's tale: Japan's foreign investment as a reflection of its domestic economy

Authors: Craig Freedman, Alexander Blair, Demi Chung

Addresses: Department of Economics, Macquarie University, Sydney NSW 2109, Australia. ' Department of Economics, Macquarie University, Sydney NSW 2109, Australia. ' School of Accounting, The Australian School of Business, University of New South Wales, Sydney NSW 2052, Australia

Abstract: One aspect of globalisation has been the changing pattern of foreign investment in East Asia. The evolving pattern reflects both the objectives of potential investors and the constraints imposed by the host governments. Future trends should be heavily influenced by Japanese decisions since Japan will continue to maintain one of the largest economies in the region. Japanese direct foreign investment appears to have greatly redefined itself over the post-war era. However, our analysis demonstrates that the pattern of Japanese overseas investment has been a dependable reflection of its domestic economy as constrained by the political imperatives of the day. The fundamental changes now occurring within the Japanese economy will most likely herald a corresponding departure in the nature of its investment policy.

Keywords: Japan; foreign direct investment; FDI; China; foreign investment; globalisation; domestic economy; investment policy.

DOI: 10.1504/IJBG.2010.032969

International Journal of Business and Globalisation, 2010 Vol.4 No.4, pp.322 - 337

Published online: 05 May 2010 *

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