Vol. 6 Num. 1 - GCG: Revista de GlobalizaciÃ³n, Competitividad y ...

More documents

Recommendations

Info

Melba Falck ReyesFigure 2. Japan. Evolution of outward Foreign Direct Investment 1983-2010.Million US dollars41140000BubbleburstGlobal Crisis120000100000PlazaAccord/YenappreciationLiberalizationFDI Regime800006000040000200000Source: Own elaboration with data from Japan External Trade Organization, JETRO (http://www.jetro.go.jp/en/reports/statistics/).Among the factors that explain the increased outflow of Japanese investment funds are theappreciation of the yen since the mid-eighties, the high costs of production faced by Japanesefirms in the domestic market that induced them to look for lower cost locations (Saxonhouse& Stern 2004; Okina, et al. 2001; Bailey 2003), the opening of the foreign investmentregime in Japan in the late nineties (Solís 2005) and the development of new technologythat allowed firms to fragment their production processes in different locations. In additionto these were Japan’s commercial frictions due to its high trade surplus, especially with theUS, which stimulated the Japanese TNs to transfer their production in order to dodge thesetrade barriers during the eighties (Koido 2003).Therefore, during the eighties, outward Japanese FDI flows were directed mainly towardsthe US, targeting the domestic market. In the next decade, Asian countries also becamemain receivers of Japanese investment and China, which barely attracted Japanese FDI inthe eighties, has become at present an important receiver. Unlike investment in the US, theJapanese investment that flows towards China and other neighbors in Southeast Asia is concentratedin the exporting sector. In fact, Japanese investment in Asia has been the enginethat promoted that region to become the ‘factory’ of the world. It has fostered productionGCG GEORGETOWN UNIVERSITY - UNIVERSIA ENERO-ABRIL 2012 VOL. 6 NUM. 1 ISSN: 1988-7116pp: 36-54
Japanese Foreign Direct Investment in Mexico and the Impact of the Global Crisis42networks that have intensified trade in intermediate goods under the modalities of arms’length trade and intra-firms and inter-firms relations, developing in the process the sector oflocal suppliers in less developed countries of the region (Falck Reyes 2011a).This pattern of development of Japanese FDI since the eighties has had two major effectson Mexico as a host country: on the one hand it benefited from the flow of Japanese FDIto the US, as that flow promoted the formation of production networks in Mexico not onlywith the US but also with East Asia, and on the other hand, it faced a greater challenge as itincreasingly had to compete with Asian countries for Japanese FDI. It must be pointed out,though, that as labor costs in China have risen lately, some foreign firms have consideredMexico as a good alternative to locate their production.4. Japanese FDI before the signing of the EPA with MexicoUntil the end of the nineties, Mexico’s trade relations with Japan were characterized by avery low penetration of Mexican products in the Japanese market, while imports from Japanwere closely linked to the Japanese investment established in Mexico. For exports, theabsence of a long-term strategy to penetrate the Japanese market kept Mexico from takingadvantage of the opportunities emerging in this market in the nineties due to the deregularizationand gradual liberalization undertaken by Japan. The NAFTA absorbed all of Mexico’sattention. For imports, the absence of an industrial strategy with emphasis on the developmentof the small and medium-size enterprises (SME) sector as suppliers to the exportingsector reflected the strong dependence on the inputs imported by the Japanese plants andthe cross-border plants known as maquiladoras.As it has been pointed out, the foreign direct investment flows into Mexico increased significantlyafter the NAFTA was signed in 1994; according to official data from the Ministryof Economy, Japanese FDI represented about 2.5% of total inflows. However, this statisticdoes not reflect the whole story regarding the Japanese FDI in Mexico, due to the factthat it does not include the investment from Japanese subsidiary companies established inthe US. With the information provided by the survey “The Japanese companies in Mexico2000”, carried out by the Japanese embassy in Mexico, JETRO-Mexico and the JapaneseChamber of Commerce and Industry of Mexico, A.C., it has been estimated that the ratioof the FDI coming from the Japanese subsidiaries in the US to that from the companies inJapan is 3.4:1. The same source estimates that the Japanese FDI represents about 20%of the total FDI in Mexico (JETRO-Mexico). These findings coincide with those obtained byacademic research on the maquiladora plants in Mexico, published in a book coordinatedby Carrillo & Barajas 2007. According to this study, East Asian investment has been gainingparticular importance in the states on the border with the US, where the FDI from JapaneseTNs showed a participation of 11% in 2002, concentrated on the electronic and automobileparts industries (Almaraz 2007). In the same study, Carrillo and Hualde refer to the transferof Japanese subsidiaries from the U.S. to the northern city of Tijuana, most of which haveconcentrated on the manufacturing of TV sets. This sector has contributed to the high participationMexico enjoys in the US market.GCG GEORGETOWN UNIVERSITY - UNIVERSIA ENERO-ABRIL 2012 VOL. 6 NUM. 1 ISSN: 1988-7116pp: 36-54
Page 2 and 3: CARTA DEL EDITOR IN CHIEFEditor in
Page 5 and 6: StaffDe la Torre, José, Dean, Chap
Page 7 and 8: Staff2. MULTINACIONALES, INVERSIÓN
Page 9 and 10: SELECCIÓN PROCEDURE PROCEDIMENTOIN
Page 11 and 12: Instrucciones para Autores y Proced
Page 14: INDEXACIÓN INDEXING INDEXAÇÃOInd
Page 17 and 18: Economic Relationships between Lati
Page 19 and 20: Economic Relationships between Lati
Page 21: Economic Relationships between Lati
Page 24 and 25: Miguel A. MontoyaThe rest of the pa
Page 27 and 28: International Joint Ventures among
Page 35 and 36: 36Japanese Foreign Direct Investmen
Page 37 and 38: Japanese Foreign Direct Investment
Page 39: Japanese Foreign Direct Investment
Page 55 and 56: 561. IntroductionClusters and indus
Page 57 and 58: Entrepreneurial Clusters in China a
Page 91 and 92:
921. Introduction: Mexico and China
Page 93 and 94:
Why isn’t Mexico on China’s Gro
Page 95 and 96:
Page 97 and 98:
Page 99 and 100:
Page 101 and 102:
Page 103 and 104:
Page 105 and 106:
Page 107 and 108:
1081. IntroductionChina and Latin A
Page 109 and 110:
Promote China-Latin American Relati
Page 111 and 112:
Page 113 and 114:
Page 115 and 116:
1161. A Brief History of Economic r
Page 117 and 118:
Building the New Silk Road across t
Page 119 and 120:
Page 121 and 122:
Page 123 and 124:
Page 125 and 126:
Page 127 and 128:
Page 129 and 130:
Page 132 and 133:
Zhu HongboIn fact, some Latin Ameri
Page 134 and 135:
Zhu Hongbo5. Conclusions135China an
Page 136 and 137:
1. Introduction137China’s emergen
Page 138 and 139:
Edy WongTable One: Compositions of
Page 140 and 141:
Edy WongTable 2: China’s R & D Ex
Page 142 and 143:
Edy Wongon ‘new economic geograph
Page 144 and 145:
Edy WongIn today’s global market,
Page 146 and 147:
Edy Wongdemand-side factors in the
Page 148 and 149:
Edy Wongterms of quality, reliabili
Page 150 and 151:
Edy Wongindustry. Second, value cha
Page 152 and 153:
Edy Wongconsumption of Western luxu
Page 154:
Edy WongReferences155Child, J.; Rod
show all

Vol. 6 Num. 1 - GCG: Revista de GlobalizaciÃ³n, Competitividad y ...

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?