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URN etd-0206107-164056
Author Yi-Jun Du
Author's Email Address No Public.
Statistics This thesis had been viewed 4647 times. Download 931 times.
Department Interdisciplinary Studies
Year 2006
Semester 1
Degree Master
Type of Document
Language zh-TW.Big5 Chinese
Title Causing Factors of Foreign Direct Investment
─ The Case of Japan
Date of Defense 2007-01-18
Page Count 74
Keyword
  • forecast error variance decomposition
  • impulse response function
  • foreign direct investment
  • Japan
  • wage
  • vector autoregression model (VAR)
  • Abstract Abstract
    Japan is the second largest economic power in the world. It has a great deal of FDI outflows but few FDI inflows. Therefore, Japan is in the serious situation of “FDI balance of payments deficit.” In terms of inward FDI stocks as a percentage of GDP and gross fixed capital formation, Japan is the lowest place of G-7. The purpose of this research is focusing on discussing the shortage of FDI inflows and causing factors which lower the desires of investments in Japan by using the simplest way which is based on the actual situation and the limit of the information in Japan. This paper takes the quarterly data of Japan from 1978 to 2005 and four variables (wage index, real exchange rate, trade and FDI inflows). In this research, the unit root test is used to check if the data have the stationarity or not, and then it uses vector autoregression model (VAR) to proceed impulse response function and forecast error variance decomposition. According to the result of these two approaches, we can figure out the influences of four variables for each other, and then find out the causing factors which lead Japan to have less FDI inflows.
    The calculation shows that the reason which leads Japanese wages to increase gradually results not only from real exchange rate, trade and FDI inflows, but also from Japanese labor system (lifetime employment system and payment according to working seniority) and the labor quantities. The causality runs from real exchange rate to trade is greater than vice versa. Trade has a positive impact from the real exchange rate which means that the depreciation can accelerate trade. However, the main factor of hindering FDI inflows is Japanese high wages rather than real exchange rate or trade. Therefore, in order to get rid of the depression which was caused by the bubble economy in 1990s, Japanese government not only opens up the restrictions in policy but also takes the control of the prime costs into the most important consideration.
    Advisory Committee
  • Jia-Hsi Weng - chair
  • Ming-jang Weng - co-chair
  • Yung-hsiang Ying - advisor
  • Files
  • etd-0206107-164056.pdf
  • indicate accessible in a year
    Date of Submission 2007-02-06

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