ABSTRACT
INTRODUCTION Ten years ago, a comparison of the foreign direct investment (FDI) activities of Japanese multinational enterprises (MNEs) in the United States and Western Europe would have appeared somewhat misdirected, if not irrelevant. Japan's export success, rather than its foreign value-added activities, was a far more important measure of Japan's growing international competitiveness. Since the late 1980s, however, trade has taken a back seat to FDI as a key indicator of Japan's increasing involvement in the world economy. The rapidity with which this shift is occurring is remarkable, even as the context against which it is taking place is undergoing unprecedented change.
