SSJ Colleagues,
Below are working url links to the RIETI inward-FDI policy update paper.
KCI
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RIETI Policy Update 047
Inward Foreign Direct Investment as a New Growth
Paradigm: Empirical evidence from Japan

Kathryn Ibata-Arens
Former Visiting Scholar, RIETI
Associate Professor, Department of Political Science,
DePaul University

http://www.rieti.go.jp/en/special/policy-update/047.htm
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http://www.rieti.go.jp/en/special/policy-update/047.pdf

Abstract
A puzzle has confounded observers of the Japanese
economy in recent years―despite its strong innovative
capacity, why has Japan failed to produce significant
new business growth? This paper argues that Japan,
historically closed to inward foreign direct investment
(FDI), has an opportunity to pursue a new growth
strategy through greater openness to foreign firms.
This paper provides an overview of the population of
foreign-owned firms in Japan and traces the growth in
their establishment over the last 30 years, paying
special attention to trends in the 2000s. Utilizing a
unique, extensive set of data compiled from macro and
micro level data from the Statistics Bureau, the
Ministry of Internal Affairs and Communications (MIC),
the Ministry of Economy Trade and Industry (METI), and
Teikoku Data Bank (TDB), descriptive statistics compare
domestic and foreign firms in three establishment
cohorts (1980s, 1990s, 2000s) over a number of
measures, including sales, capital, employment, and
profit. Findings indicate that foreign-owned firms,
particularly those established in the 2000s in Japan,
are more efficient with capital and are lower credit
risks than domestic firms. Furthermore, foreign firms
employ more workers over time. As such, foreign firms
have become agents of institutional change and new
growth in Japan, presenting opportunities for Japan to
improve its absorptive capacity to inward FDI and
foreign business, netting positive returns for firms
and the Japanese economy.