Japan's outward FDI potential

Theresa M. Greaney; Kozo Kiyota

doi:10.1016/j.jjie.2020.101073

Japan's outward FDI potential

Theresa M. Greaney, Kozo Kiyota

Keio Economic Observatory(KEO)

Research output: Contribution to journal › Article › peer-review

4 Citations (Scopus)

Abstract

While Japan's outward FDI stock is historically high, it is not necessarily clear whether there is untapped growth potential, given the economic size of Japan and that of partner countries. This paper examines whether Japan's actual outward FDI stock is high or low relative to the FDI predicted by the gravity model using the outward FDI patterns of all OECD nations, which we call counterfactual FDI. The results indicate that the ratio of Japan's actual to counterfactual FDI is the highest among the OECD countries as of the year 2015. The regional distribution of Japan's actual to counterfactual FDI favors Southeast Asian nations, South Africa and the US. These results imply that Japan has no unrealized potential for outward FDI.

Original language	English
Article number	101073
Journal	Journal of The Japanese and International Economies
Volume	57
DOIs	https://doi.org/10.1016/j.jjie.2020.101073
Publication status	Published - 2020 Sept

Keywords

Gravity model
Japan
Outward foreign direct investment

ASJC Scopus subject areas

Finance
Economics and Econometrics
Political Science and International Relations

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

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10.1016/j.jjie.2020.101073

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title = "Japan's outward FDI potential",

abstract = "While Japan's outward FDI stock is historically high, it is not necessarily clear whether there is untapped growth potential, given the economic size of Japan and that of partner countries. This paper examines whether Japan's actual outward FDI stock is high or low relative to the FDI predicted by the gravity model using the outward FDI patterns of all OECD nations, which we call counterfactual FDI. The results indicate that the ratio of Japan's actual to counterfactual FDI is the highest among the OECD countries as of the year 2015. The regional distribution of Japan's actual to counterfactual FDI favors Southeast Asian nations, South Africa and the US. These results imply that Japan has no unrealized potential for outward FDI.",

keywords = "Gravity model, Japan, Outward foreign direct investment",

author = "Greaney, {Theresa M.} and Kozo Kiyota",

note = "Funding Information: The authors thank two anonymous referees for very helpful suggestions on this research project. Kozo Kiyota was a Visiting Scholar at the University of Hawai{\textquoteleft}i when this research was undertaken. Kiyota also acknowledges the financial support received from the JSPS Grant-in-Aid (JP18KK0348, JP19H00598) and a grant-in-aid from Zengin Foundation for Studies on Economics and Finance. Publisher Copyright: {\textcopyright} 2020 Elsevier Inc.",

year = "2020",

month = sep,

doi = "10.1016/j.jjie.2020.101073",

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journal = "Journal of the Japanese and International Economies",

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AU - Greaney, Theresa M.

AU - Kiyota, Kozo

N1 - Funding Information: The authors thank two anonymous referees for very helpful suggestions on this research project. Kozo Kiyota was a Visiting Scholar at the University of Hawai‘i when this research was undertaken. Kiyota also acknowledges the financial support received from the JSPS Grant-in-Aid (JP18KK0348, JP19H00598) and a grant-in-aid from Zengin Foundation for Studies on Economics and Finance. Publisher Copyright: © 2020 Elsevier Inc.

PY - 2020/9

Y1 - 2020/9

N2 - While Japan's outward FDI stock is historically high, it is not necessarily clear whether there is untapped growth potential, given the economic size of Japan and that of partner countries. This paper examines whether Japan's actual outward FDI stock is high or low relative to the FDI predicted by the gravity model using the outward FDI patterns of all OECD nations, which we call counterfactual FDI. The results indicate that the ratio of Japan's actual to counterfactual FDI is the highest among the OECD countries as of the year 2015. The regional distribution of Japan's actual to counterfactual FDI favors Southeast Asian nations, South Africa and the US. These results imply that Japan has no unrealized potential for outward FDI.

AB - While Japan's outward FDI stock is historically high, it is not necessarily clear whether there is untapped growth potential, given the economic size of Japan and that of partner countries. This paper examines whether Japan's actual outward FDI stock is high or low relative to the FDI predicted by the gravity model using the outward FDI patterns of all OECD nations, which we call counterfactual FDI. The results indicate that the ratio of Japan's actual to counterfactual FDI is the highest among the OECD countries as of the year 2015. The regional distribution of Japan's actual to counterfactual FDI favors Southeast Asian nations, South Africa and the US. These results imply that Japan has no unrealized potential for outward FDI.

KW - Gravity model

KW - Japan

KW - Outward foreign direct investment

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Japan's outward FDI potential

Abstract

Keywords

ASJC Scopus subject areas

UN SDGs

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