ABSTRACT
Europe is still new for the majority of Japanese firms as a site for local production, especially in manufacturing, although the volume of trade between Europe and Japan has been sizeable for some time. Indeed, only in the past couple of years has Japanese direct investment in Europe grown dramatically. For example, at the start of the 1980s, Europe accounted for a mere 10 per cent of Japan’s cumulative total of overseas investment compared to 35 per cent for the United States, even though the combined gross domestic product of the EC was not far behind. Furthermore, only 23 per cent of Japanese investments in Europe were in manufacturing while the balance was mostly in services, especially commerce – as high as 44 per cent. Yet in 1987, Europe received as much as 20 per cent of Japan’s new investment (Focus Japan, February 1989, p.A).
