Question

Please Respond to the following discussion post:

The significant purposes behind low FDI in Japan are numerous. There were strict government directions, which made it troublesome for outside organizations to build up a base in Japan. A number of Japanese organizations are against acquisitions by remote endeavors and this is a result of a question among the Japanese organizations expecting that remote organizations would rebuild, cut business openings and furthermore disjoin long haul associations with suppliers. Also it is troublesome for remote organizations to discover administrative ability in Japan, as the vast majority of Japanese supervisors will in general stick to one manager for their entire working life. Also Japanese economy is a moderate development one and combined with a maturing populace alongside an abating utilization levels makes it less worthwhile for remote firms to invest. The potential advantages of FDI to Japanese economy are: Increased rivalry due to FDI which would help in efficiency. Foreign speculation would likewise convey more up to date thoughts with in regards to the executives and mechanical advancement that would help in enhancing profitability.

Answer 1

Receiving direct investment from foreign companies promotes economic growth the benefits of receiving direct investment are not limited. This also include qualitative improvements through transfers of advanced technology and management know-how to Japanese companies. FDI helps to increasing investment, production, and employment.The US and Germany for instance have ratios seven to eight times higher than Japan, while China and South Korea have ratios three to four times that of Japan’s. factors hinder inward direct investment are as follows. 1-high cost of doing business, the high corporate and other tax rates applicable to businesses and high office rents. 2-administrative proceduresthe the complexity of approval and licensing systems. Japanese manufacturers themselves gradually replaced trading companies in controlling this trade, establishing independent subsidiaries. 3-complex distribution channels and anticompetitive business practices that make market entry difficult. 4-lack of infrastructure, intrusive regulations and government guidance, and difficulty in getting preferential treatment can be tackled by the government. the European Business Council in Japan (EBC) and the American Chamber of Commerce in Japan (ACCJ) have detailed information concerning specific regulations that are hampering their business activities. For example, a report issued by the EBC cites regulations such as those concerning food additives, moves to ban prepaid mobile phones, and restrictions on cross-border stock exchanges as examples of policies blocking inward FDI.mergers and acquisitions are also surging in Japan, they are much less common than in other developed countries. We can see that these types of regulations are detrimental to inward FDI