書 評 Foreign Direct Investment in Japan
Masaru Yoshitomi and Edward M. Graham (eds),
1996, Edward Elgar (Ltd.) , Cheltenham , UK
(大阪大学附属図書館所蔵 ＜338. 92 YOS＞)
This edited volume tackles three important policy questions: is the amount of foreign direct investment (FDI) in Japan too small? if so, why is it so small? what should the government do to promote FDI in Japan? If you have the feeling that you have heard similar questions before, you would be right as many of the issues and arguments raised in the context of Japan's trade appear again but there are some new twists. For example, lax auditing requirements in Japan's Commercial Code are suggested by Neuman as creating an impediment to FDI by making it difficult for foreign investors to evaluate the financial status of potential Japanese business partners. Notwithstanding the difficulty of determining the optimal stock of foreign direct investment in any country and what economic factors it depends on, the consensus that emerges is that the amount of FDI in Japan is in fact too small. Taking this as given, leads to the question of why and here there is a considerable divergence of views among the authors. Since the current formal legal regulations on FDI are minimal, the reasons for the low level of FDI must lie elsewhere. One approach seeks to identify obstacles or impediments in Japan to the entry of foreign companies, for example, high corporate tax rates, keiretsu and the Large Retail Store Law. Another approach suggests that the fault lies with the foreign firms themselves: they do not enter the Japanese market because they are uncompetitive or they have mistaken expectations about business opportunities in Japan. Three particularly interesting arguments concerning the low level of foreign activity in Japan are: the last 400 years of Japanese history suggest Japanese firms have superior capabilities; history also matters in that what FDI we observe today is heavily influenced by the pattern of direct regulation imposed on FDI in the past; and the characteristics of the Japanese labor market like life term employment which foreign companies do not (cannot?) offer affect the type and quality of workers they can hire and, as a result, their competitiveness. A policy maker reading the volume will come across many suggestions for government intervention, for example, the Japan Development Bank should provide increased loan facilities and better (subsidized) terms on loans to foreign companies in Japan. However, the reader gets no clear idea about which government interventions will really make a difference. It is also rather surprising that no mention is made of the 'onion' hypothesis - peeling away one layer of regulation will make no difference because of all the remaining layers of regulation. If you are looking for a balanced presentation of the issues surrounding FDI in Japan, this volume is for you. Critical commentaries on every chapter enhance the value of the volume greatly.
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