ABSTRACT
This chapter focuses on Japan’s direct investment in Western Europe. The theories of Kiyoshi Kojima and T. Ozawa deal with the macroeconomic forces impelling Japanese firms to engage in Foreign Direct Investment (FDI). Analysis of the structure of Japanese FDI flows shows that manufacturing is a relatively minor component. Japanese FDI in Europe is largely intended to support trading activities, particularly exporting. The large increase in FDI in the transport equipment sector during the period 1978–1982 is mainly due to two Nissan investments. The British government has given staunch support and indeed solicited the investment, but resistance came from a variety of pressure groups including the French and Italian authorities, local competitors, and Japanese trade unions. The theory of Professor Ozawa, which states that manufacturing FDI will particularly occur in industries of low concentration, offers little within the context of Europe.
