ABSTRACT
The objective o f the study is to critically examine the hypothesis advanced by Professor Kiyoshi Kojima about the pattern o f Japanese foreign direct investment (FDI) and additionally to present a more general hypothesis capable o f explaining the dynamic pattern in industrial composition and other characteristics o f Japan’s FDI in South Korea. Recently, Japan’s FDI has become a significant player in international business. The relative decline in the U S’s position as an international direct investor was inevitable. It primarily reflects the reinstatement o f Continental European countries as leading outward investors and the emergence o f Japan as a major global player. In 1988, the four main European investors (the UK, Western Germany, the Netherlands and France) and Japan accounted for 46.9 percent o f the accumulated stock o f FDI compared with only 26.3 percent in 1960. More particularly, between 1980 and 1988, the net increase in the four capital stake of the UK, West Germany, and Japan rose by $237 billion - nearly twice that o f the US of $125 billion (Dunning 1993).
