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Characteristics and Performance of
Japanese Foreign Direct Investment in Africa
International Journal of Economic Policy in
Emerging Markets
(forthcoming 2011)
Elie V. Chrysostome
State University of New York - School of
Business and Economics
NATHANIEL C. LUPTON
The University of Western Ontario - Richard Ivey
School of Business
Abstract
This article
examines the characteristics and performance of
Japanese foreign direct investment (JFDI) in
Africa. For that purpose a large sample of 1062
Japanese subsidiaries doing business in Africa
was selected from the Tokyo Keizai database and
analyzed. Our findings reveal several important
observations as follow: 1) efficiency and market
seeking was the common purposes for investment
by Japanese firms in Africa; 2) furthermore
strategic asset seeking was the common purpose
for investment by Japanese firms in low income
region and lower middle income regions while
resource seeking was relatively the common
purpose for investment in upper middle income
region; 3) the main industry for investment by
Japanese firms in the low income region was low
technology manufacturing while the main industry
for investment in the lower and upper income
regions was high technology manufacturing; 4)
the Japanese subsidiaries are young and small in
lower middle income region, young and large in
upper middle income region and old, small and
large in low income region; their performance is
good with a very high exit rate in low income
region while the performance is high with high
exit rate in low middle income region and
moderate with a low exit rate in upper middle
income region.
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