ABSTRACT
This chapter begins with an overview of the factors responsible for increased Japanese direct investment in the region during the late 1980s. Ownership-specific advantages enjoyed by Japanese service enterprises are then considered, in conjunction with location advantages in the region. Service enterprises have been prominent in the contributions which Japanese transnational corporations have made to economic growth in the Asia-Pacific region, especially since the appreciation of the yen in 1985. As Japanese manufacturing firms moved into more sophisticated areas where R&D and after-service were important, the availability of market information, communications, transportation and financial services became the main determinants of location advantages. The significance of financial services was especially evident because Japanese banks and securities firms tended to move to countries with deregulated financial markets. Research on Japanese international firms providing distributive services is rather new, and assessment of their activities is difficult because of analytical and data problems.
