Determinants of foreign direct investment: Evidence from a questionnaire survey in the Japanese manufacturing sector

This paper explores the results of a questionnaire survey investigating the determinants of foreign direct investment (FDI) by Japanese manufacturing firms from 1994 to 2009. Specifically, the questionnaire asked the respondent firms their reasons for considering foreign rather than home country locations, as well as major obstacles to undertaking FDI. Although labour availability and proximity to markets, supplier firms and raw materials are key determinants, this study reveals that there are significant variations among manufacturing industries. The analysis also reveals differences among industries with regard to obstacles to undertaking FDI and reasons for preferring a home country location.