Inward foreign direct investment by MNEs in Japan up to 1980
BEM 3030 International Business History Assignment 2 !
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An Explanation and Review of inward foreign direct investment by
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Student ID: 610059574 !
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University of Exeter !
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Prepared for: !
Professor David Boughey !
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University of Exeter
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BEM 3030 International Business History Assignment 2 !
Introduction !
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Japan’s restrictive stance towards inward foreign direct investment (IFDI) has been particularly prominent from the origins of 12th century Japan through the Tokugawa shogunate and Meiji era, till late 1960s when liberalisation gradually took place. Much debate has centred around the development of IFDI in Japan, which saw various stakeholders each taking a different stance towards liberalisation of the Japanese market.
Many foreign multinational enterprises (MNEs) took particular interest in the Japanese market as they saw huge potential in the rapidly growing economy then. This essay will explore the reasons why MNEs wanted to enter Japan and the corresponding development of IFDI in Japan (in particular the period between 1868 to 1980), by understanding the perspectives and relationships of the stakeholders involved. The discussion will also examine a few prominent foreign MNEs; the various means they employed in an attempt to penetrate the Japanese market, and if they eventually succeeded or failed. !
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Understanding MNE’s attraction to Japan: Reasons, Challenges, and
Case Studies!
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Japan was not particularly an easy market to enter, largely due to a staunchly nationalist government which was sceptical of IFDI, patent cultural differences and language barriers, isolated geographic position, and its rather unique job market policies (Paprzycki and
Fukao, 2005). Yet, Japan was increasingly attractive to foreign MNEs, as they saw longterm growth potential of the Japanese market. Japan was also a major industrial nation with a huge internal
!
!
!
!
!
!
!
!
!
An Explanation and Review of inward foreign direct investment by
MNEs in Japan up to 1980 (Qn.13)!
!
!
by!
!
!
Student ID: 610059574 !
!
University of Exeter !
!
!
Prepared for: !
Professor David Boughey !
!
!
University of Exeter
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
BEM 3030 International Business History Assignment 2 !
Introduction !
!
Japan’s restrictive stance towards inward foreign direct investment (IFDI) has been particularly prominent from the origins of 12th century Japan through the Tokugawa shogunate and Meiji era, till late 1960s when liberalisation gradually took place. Much debate has centred around the development of IFDI in Japan, which saw various stakeholders each taking a different stance towards liberalisation of the Japanese market.
Many foreign multinational enterprises (MNEs) took particular interest in the Japanese market as they saw huge potential in the rapidly growing economy then. This essay will explore the reasons why MNEs wanted to enter Japan and the corresponding development of IFDI in Japan (in particular the period between 1868 to 1980), by understanding the perspectives and relationships of the stakeholders involved. The discussion will also examine a few prominent foreign MNEs; the various means they employed in an attempt to penetrate the Japanese market, and if they eventually succeeded or failed. !
!
Understanding MNE’s attraction to Japan: Reasons, Challenges, and
Case Studies!
!
Japan was not particularly an easy market to enter, largely due to a staunchly nationalist government which was sceptical of IFDI, patent cultural differences and language barriers, isolated geographic position, and its rather unique job market policies (Paprzycki and
Fukao, 2005). Yet, Japan was increasingly attractive to foreign MNEs, as they saw longterm growth potential of the Japanese market. Japan was also a major industrial nation with a huge internal
References: Buckley, P. J., Mirza, H. and Sparkes, J. R. 1987. Direct foreign investment in japan as a means of market entry: The case of European firms 1 Mason, M. 1992. Foreign direct investment in Japan: Lessons from business history. The International Executive, 34 (1), pp Mason, M. 1992. American multinationals and Japan. Cambridge, Mass.: Council on East Asian Studies, Harvard University. Mason, M. 1987. Foreign Direct Investment and Japanese Economic Development, 1899-1931. Paprzycki, R. and Fukao, K. 2005. The extent and history of foreign direct investment in Japan. HiStat Discussion Paper, (84). Yoshino, M. Y. 1970. Japan as Host to the International Corporation in C. Kindleberger (ed.), The International Corporation – A Symposium, Cambridge, Mass., The MIT Press.