Table of Contents

Japanese Investment in the World Economy

Japanese Investment in the World Economy

A Study of Strategic Themes in the Internationalisation of Japanese Industry

New Horizons in International Business series

Roger Farrell

This book examines Japanese Foreign Direct Investment (FDI) in the world economy over more than five decades. It provides a unique focus on the internationalisation experience of selected industries, such as forestry, textiles, electronics, motor vehicles, steel and services as well as case studies of individual firms. Japanese Investment in the World Economy is distinctive in that it examines overseas investment by firms in the primary, manufacturing and services sectors over the period in which the Japanese economy became the second largest in the world.

Chapter 10: Forestry, Lumber and Pulp

Roger Farrell

Subjects: asian studies, asian business, asian economics, business and management, asia business, international business, economics and finance, asian economics


OVERVIEW Japanese investment in overseas forestry, lumber resources and pulp and paper processing facilities has occurred to supplement the use of forests in Japan, partly due to rising costs and the imposition of greater restrictions on use of domestic forestry reserves. Overseas investment has sought to secure access to alternative forestry resources for processing in Japan, which is a major importer of lumber, woodchips and wood pulp. These raw materials and intermediate products are processed in Japan for industries such as construction and paper manufacturing. In the post-war period, domestic forestry resources initially supplied most of Japanese demand for lumber and wood pulp, but fast growth led to resource shortages and investment overseas to secure supplies of forestry resources, as well as lumber and pulp. Cost and access considerations also drove overseas investment and encouraged a greater reliance on imports – which have accounted for a rising share of market supplies of forestry products. Even in 2005, Japan’s forest covered over sixty per cent of its total land area but was not readily available for all domestic needs. Over the last half century, the direction of trade and investment by the Japanese forestry, lumber, pulp and paper industries has shifted continually: from an early reliance on the Philippines, which eventually placed a ban on forestry exports because of deforestation, to Malaysia, then Indonesia and also Canada, in response to changing access arrangements for forestry resources and fluctuations in world prices. Political concerns over the environmental impact of deforestation and an economic...

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