Date of this Version

10-2008

Document Type

Journal Article

Publication Details

Freedman, C., Blair, A. and Chung, D. (2008) The handmaiden’s tale: Japan’s foreign investment as a reflection of its domestic economy

Working Paper Series; No. 26, Oct. 2008.

Copyright © Craig Freedman, Alexander Blair Demi Chung and The Globalisation and Development Centre, Bond University, 2008.

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. The unsettled question is to what degree such strategy will continue to play handmaiden to more provincial concerns or whether this essential influence will to some degree be reversed.