Japan’s outward FDI: The role of Russia

The study provides an overview of key trends, dynamics, sectoral and geographical structure of Japan’s outward foreign direct investment. Since the 1980s Japan became some of the world’s most prominent source country for foreign direct investments (FDI). The outline of the factors contributed to that effect and the evolution of Japan’s rank in global FDI outflow is given.

The export of capital, associated with the active shift of production capacities from Japan to foreign countries, led to an intensification of the deindustrialization process, often referred to as the ‘hollowing-out’ of the domestic manufacturing. It caused an increase in negative trends in the Japan's economy: slowdown in the industrial production growth rate and manufacturing employment, deterioration of the tradables’ competitiveness. Nevertheless the scale of overseas business of Japanese multinationals in the in the early 21st century continued to grow and in 2018-2019 Japan was the leading overseas investor in the world.

The largest amount of Japanese stock FDI has been accumulated in the USA and Western Europe. In recent decades Japanese FDI to China significantly increased. However, with US-China friction and ‘demandshock’ brought about by COVID-19 Japan announced the shift of production out of China back to Japan and other countries.

The study examines the role of Russia in Japan’s outward FDI. The entry strategies of Japanese business in Russia and the key sectors, attracting Japanese capital with an emphasis on the automotive industry, are analyzed.

The paper concludes with the discussion of the challenges and promising areas for doing business with Russia in the opinion of Japanese companies.

Keywords

Japan, outward foreign direct investment, Russia

Received

05.12.2020

Publication date

17.03.2021

Number of characters

26526

Cite

GOST	Podoba Z. Japan’s outward FDI: The role of Russia // Asia and Africa Today – 2021. – Issue 2 C. 15-23 [Electronic resource]. URL: https://asaf-today.ru/S032150750012594-5-1 (circulation date: 25.04.2024). DOI: 10.31857/S032150750012594-5
MLA	Podoba, Zoia "Japan’s outward FDI: The role of Russia." Asia and Africa Today 2 (2021):15-23. DOI: 10.31857/S032150750012594-5
APA	Podoba Z. (2021). Japan’s outward FDI: The role of Russia. Asia and Africa Today (2), pp.15-23 DOI: 10.31857/S032150750012594-5

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