ABSTRACT
There are many reasons to invest in other countries. The host government's trade policies, FDI environments, and various incentives offered by individual EU member governments are said to be very important factors in influencing the investment decisions of firms from non-EU member countries. From the investors' viewpoint, the history of economic and industrial policy in the host country will be another factor taken into consideration. According to the OECD survey (1989), however, the 'specific incentives' of MNEs have played an important role in influencing the location of FDI in particular countries, although they have not, in general, been a major determinant of the general decision to invest in the EU. This trend showed more strongly for Japanese investment in the EU. What is specific incentive for Japanese investment? The role of inter-government relations will be discussed here as a vital factor: the 'pull and push' factors already discussed.
