Japanese overseas Investment in Recent Years and Corporate Responses to the Single EC Market

Faced with sharp yen appreciation, harsh trade friction and ridden the crest of the globalisation of the Japanese economy and business, Japanese foreign direct investment was extremely active in the second half of the 1980s, Nevertheless, it has been slowing down in the early 1990s. This paper clarifies the characteristic trends in Japanese overseas investment in recent years. On I January 1993, the single EC market came into effect. Its strategic implication consisted in strengthening the competitiveness of European companies and driving a wedge into the economic dominance of the U.S. and Japan. Japanese frms also faced with the compelling problem of responding to the EC market integration. A greater part of the paper is devoted to Japanese corporate responses to the single EC market. The detailed analysis is based upon the surveys conducted by three institutions. In conclusion, the paper emphasizes that the real pan-europeanisation of Japanese frms lies in maintaining and improving the quality of life of Europeans through localisation of production, management and R&D in Europe.