(version in 日本語)
Japanese-brand cars have become everyday, household items in the United States, and it’s hard to drive in the country without seeing one on the roads. These cars may be manufactured by Japanese firms, but about 70 percent of these vehicles are actually produced in North America. Globally, in 2014, about two-thirds of Japanese cars were produced on assembly lines outside of that country. Despite the increase in overseas demand for Japanese vehicles, this hasn’t been mirrored by an expansion in investment, and the building of factories in Japan to meet that demand.
Against this background, our IMF Working Paper looks at possible reasons for this sluggish recovery of corporate investment in Japan, focusing on the role of Japanese firms overseas.