Can Protectionism Explain Direct Investment?*

The Determinants of New FDI Capital Flows into the EC: A Statistical Comparison of the USA and Japan

“…The appropriate solution is to employ an EC92 dummy variable scheme, to capture the impact of expectations about future market integration under the SMP. Aristotelous and Fountas (1996) found evidence of a significant inflow of FDI in anticipation of a barriers-free Europe, while Nicolaides and Thomsen (1991) argue that the SMP has affected only the timing of the Japanese FDI boom in the EC and not its overall long-run level.…”

“…In contrast, Japanese firms preferred greenfield entry into the EC during the 1980s (Thomsen and Woolcock, 1993). By the late 1980s, on average, around 15 per cent of foreign affiliates in the EC were the result of acquisition (Nicolaides and Thomsen, 1991). However, the pattern differed between industries.…”

Can Globalisation and Global Localisation Explain Foreign Direct Investment? Japanese Firms in Europe

“…Thomsen (1993) argued against the `Fortress Europe' hypothesis and certain kinds of location-specific advantages, such as government inducements, and put forward a strong case for the appropriateness of PLC. It is suggested that this model provides a compelling rationale for the pattern of Japanese manufacturing investment in the EU (see also Nicolaides and Thomsen, 1991).…”

“…Additionally, if this hypothesis could be confirmed by statistical testing, it still remains to be explained why, for instance, the UK seems to be more attractive to these investors than Spain or Greece. Nicolaides and Thomsen (1991) rejecting protectionism as a motive for Japanese FDI, suggest that anti-dumping duties may have been a response to, rather than the cause of, Japanese FDI in the EU. In their view, the driving force behind Japanese FDI is more likely to be the proximity to the consumer rather than protectionism.…”

Japanese Foreign Direct Investment and Regional Trade

“…lO In particular, voluntary export restraints in the automobile sector and the 1986 semiconductor trade agreement are shown to have induced sizable direct investment flows from Japan. Evidence on Japanese FDI to the European Union, however, has been less clearcut (Thomsen, 1993, Barrell and Pain, 1993, and Nicolaides and Thomsen, 1991.…”