In 2016, inward flow of FDI totaled $11,388 million in Japan* and $22,304 million in Ireland**.
-Visit the Michigan State University globalEDGE© website:
-Do some research on Japan and Ireland using any of the various resources here.
Then discuss the following:
- What factors do you think explain this difference in FDI inflows into these two countries?
Banco Santander, S. A. (2017). Japan: Foreign investment. Retrieved from https://en.portal.santandertrade.com/establish-overseas/japan/foreign-investment
Banco Santander, S. A. (2017). Ireland: Foreign Investment. Retrieved from https://en.portal.santandertrade.com/establish-overseas/ireland/foreign-investment
Just do response each posted # 1 to 3 down below only.
"FDI net inflows are the value of inward direct investment made by non-resident investors in the reporting economy. FDI net outflows are the value of outward direct investment made by the residents of the reporting economy to external economies" (datahelpdesk, 2018). Ireland is more located in the areas that are big air routes and also sea routes. I do believe that when a country is more located to these types of routes then they are going to make more profit and more investments as well. Ireland inward flow in 2016 was 22,304 million and Japan it was 11,388 million. As you can see Ireland numbers are bigger and I believe it is because of where they are located at. The economy there seems very stable and strong. When it comes to Japan has faced many issues as far as environmental issue and their economy is not as strong. Ireland is the country that more investor are interested.'
Foreign Direct Investment or FDI is by definition the investment in new facilities to produce or market in a foreign country. FDI is an existential cause in better a country by investing your resources to potentially make your country and the country that is marketed to more effective is achieving their goals or sustaining citizens. In 2017, expenditures for acquisitions[in the United States] were $253.2 billion, expenditures to establish new U.S. businesses were $4.1 billion, and expenditures to expand existing foreign-owned businesses were $2.4 billion. Planned total expenditures, which include both first-year and planned future expenditures until completion for projects initiated in 2017, were $278.0 billion (bea.gov, July 11, 2018). We as the U.S. states are not perfect, but we have astute individuals who are Americans and are really good at making a profit. Taking Ireland and Japan for instance, Ireland was estimated to have made $28 million in inward FDI flow with a 33.6% rate in 2017 and an outward flow of $18 million with a 21.6% rate in 2017. Where as Japan has an inward FDI flow of and made over $10 million with a .9% rate in 2017 and an outward flow of $160 million with a 14.2% rate. These numbers vary tremendously and this is only an example, but it can be applicable to each country. Each country varies and differs for FDI flows and stocks. There are are a multitude of factors that make up why these countries inflows. Japan prefers to market more to the other counties and brings in a predominate amount of there FDI profits that way. Ireland brings in profits from FDI inflows more than outflows. each country play to their strengths and weaknesses and FDI is only one instance.
In the year 2017, Ireland had a FDI of 28,975 million and Japan had 10,430 million. There are a few reasons why Ireland has a higher FDI than Japan:
Ireland's strong points are: "Strong and tightly knit industrial and tertiary fabric, Lowest corporate tax rate in Europe, Young, skilled and multilingual workforce, Competitive economy, Modern infrastructure, One of the lowest unemployment rates in Europe: 5.6% in 2018, Strong and stable domestic demand, notably thanks to high wages and living standards." (Banco, 2017). Ireland overall has a stronger economy which is more promising than Japan. Ireland has better wages and a lower unemployment rate. Japan's economy is not as good as Irelands. Japan has problems with deflation, they also face natural disasters like tsunamis. "Excessive regulation that hinders economic growth as it increases the cost of starting activities. The difficulties the country faces in restoring public finances and deflation. International competition restricted by a very insular local business culture: Japanese prefer to do business (especially M & A transactions) with known partner companies. In the same way, it is preferable to establish networks and alliances with companies and national professional organizations. Cultural and linguistic challenges that can be complicated to overcome for an SME. Low productivity of Japanese SMEs." (Banco, 2017).