ABSTRACT
When it comes to inward foreign direct investment (FDI), events inconceivable a decade ago have now become commonplace. Pessimists could easily point out that Japan has a long way to go to reach international standards. Skeptics point out—correctly—that almost all the acquisitions so far have been rescue operations for distressed firms. Unlike postwar Europe, which welcomed FDI as an alternative to imports, Tokyo legally restricted both imports and FDI for years. For two decades now, there have been virtually no overt governmental restrictions on inward FDI beyond the sort seen in other countries. While friendly rescues have soared, hostile takeovers are still well nigh impossible for either foreigners or Japanese. One of the more hopeful signs in Japan is “FDI initiative” launched by METI. Under Japan’s Large-Scale Retail Store Law, small merchants had the legal power to delay or even de facto prohibit the creation of new large stores, domestic as well as foreign, on the grounds of excess competition.
