Determinants Of Foreign Direct Investment Location Choice In Japan And Its Significance To Our Country

Japan’s economy has won a rapid development since the Second World War, making Japanese from an economic backward and short of resources island to a world economic power like America and the European Union, in this process, we should not neglect the role of foreign investment. But then with the economy bubble, the rise of domestic labor costs, the resources restriction, environment pollution, the increase in the trade friction and a series of problems. Japan’s foreign direct investment not clear as before but still keep a steady rising. At the same time, in order to cope with these new problems, Japan also gradually expand the scope of the foreign direct investment to realize the transformation and upgrading of domestic industry and lead to the development of the economy.In compare with Japan, China’s foreign direct investment started late and it is very similar to the 1980s of Japan’s. China’s foreign direct investment is in a state of blank before 80s. Since the 30 years’ development after the reform and opening-up policy, China’s foreign direct investment has experienced from scratch to abundant, from less to more and introduce large scale of foreign capital, all these measures rapidly expand the overseas market. The 16th CPC National Congress political report pointed out that the implementation of the strategy of "going out" is the significant move of the new stage of the opening to the outside world, encourage all kinds of ownership enterprises who have comparative advantages to increase foreign investment in order to increase the export of goods and services to form a group of strong multinational enterprises and famous brands. The successful entry into the WTO in 2001 has brought new chances to the economic development of our country, Chinese foreign direct investment is also facing new challenges, and expanding domestic foreign direct investment has become an irreversible situation. And the data also shows that in recent years, Chinese foreign direct investment has acquired outstanding fulfillments, accumulative number at the end of 2011 of Chinese foreign direct investment is $382.3 billion and invested among 132 countries and regions in the world for about $65.1 billion at 2011, to be the first one in the developing nations.While we must consider the location selection of foreign direct investment, Japanese foreign direct investment in nearly 60 years of booming development has formed their characteristics of location selection. In this article, we first review the relevant factors of Japan’s direct investment location choices, using the ordinary least squares method (OLS) to analyze the Japan’s investment panel data from 2005 to 2012 and in 37 counties and finally find how the host country’s GDP, per capita national income, the condition of resources, exchange rate and the distance between Japan influence the location choice. All these can provide reference for our country’s strategy of "going out" and help us overcome the unreasonable regional distribution.