Japanese Direct Investment in U.S. Manufacturing

摘要

The rapid inflow of Japanese foreign direct investment in recent years had led toconcern about U.S. competitiveness, technology transfer, and economic security. The report increases our knowledge about the patterns in which Japanese foreign direct investment is occurrinG by analyzing information about nearly 1,275 U.S. manufacturing plants partly or wholly owned by Japanese firms. The results of the report show: Japan's investment in the U.S. manufacturing sector is relatively small, but growing. Japanese investment as measured by employment is highly concentrated in the U.S. automotive, steel, consumer electronics, and computer industries. In terms of industry structure, Japanese companies are present at all levels of vertical integration in these industries. Japanese investment is greatest in the automotive industry. Access to new technology is an important factor in the acquisition of existing U.S. manufacturing establishments in the advanced electronics sector. In contrast, joint ventures in steel transferred Japanese state-of-the-art technology to the United States. U.S. manufacturing affiliates of Japanese firms import far more production inputs than other foreign manufacturing affiliates. The result is a small, but adverse effect on the U.S. trade deficit with Japan.