ABSTRACT
Japanese companies’ motivations for overseas direct investments have undergone dramatic changes. In North America, Japanese subsidiaries are selling mainly to the host country or within North America. The share of network surplus coming from outside the region is the largest in the Asian network, inferring that Japan’s network in Asia is bringing value into this region from other regions. Japan is playing an important role in Malaysia’s development into an industrialized country. In the early 1980, nearly 90 percent of Japanese imports from Malaysia consisted of primary commodities such as wood, rubber, and tin. Many Japanese companies have selected Malaysia as a regional production base. The primary focus of Japanese investment in Korea has been on the service industry, particularly hotels, instead of manufacturing. Japan faces particular obstacles because of the strong anti-Japanese sentiment in Korea. Hotels have become a main focus of Japanese investment because of the large number of Japanese tourists who visit Korea.
