ABSTRACT
This chapter explores the relationship between Japanese direct investment and national spatial development in selected Pacific Asian nations with a further view to the implications for urban and spatial distribution policies. The literature on the effects of foreign investment on developing countries' host economies has become extensive, ranging from the treatment of microeconomic effects to that of macrolevel impacts on aggregate savings, investment, and growth of real income, as well as income distribution effects. In considering the relationship between external economic forces and national spatial development, it seems logical first to view the impact of foreign capital inflows on economic growth and the effect of economic growth in turn on the developing country's spatial development. Japanese investments overseas before and during the Pacific war, heavily concentrated in Asia, especially in the then Japanese colonies of Manchukuo, Formosa, and Korea, were either destroyed or liquidated in the war and its aftermath.
