ABSTRACT
This chapter presents the patterns of foreign direct investment (FDI) and services’ trade in Japan and Estonia in 2010–2020 with the influences of the COVID-19 outbreak, looking at a handful of other countries (including Latvia, Lithuania and Finland). Estonia attracts investments with a business-friendly environment and exports knowledge-intensive services abroad, including Japan. FDI inward flows are capital flows invested into the company located in the hosting country. FDI outward flows are the capital flows that are funded outside the home country. Many theoretical discussions treat all FDIs and service exports as alternative ways of serving a foreign market. FDI includes three elements: equity capital, reinvested earnings and intra-company loans. Trade relations between Estonia and Japan could continue enhancing, if bilateral discussions could consider all the opportunities and acknowledge the possibilities to gain from service trade and foreign trade investment.
