Macau Periodical Index (澳門期刊論文索引)

Bayari, Celal
The patterns of Janpanese FDI in Australia after the Lehman Shock: Perspectives of the Eclectic Paradigm and institutional economics
Journal Name
Euro Asia Journal of Management
Pub. Info
Dec. 2012, Vol.22, No.1/2, pp. 29-47
Australia, Lehman Brothers shock;Institutional economics;Japanese foreign direct investment
Abstract : This paper discusses the post-'Lehman Brothers shock' period of the Japanese foreign direct investment in Australia, and provides an analysis of the types of investment. The analysis begins with the theoretical frameworks that define multinational enterprise (MNE) activity, anad foreign direct investment. The way in which 'institutional economics' theory is utilised within the 'eclectic paradigm' is also analysed herein. The 'Lehman Brothers shock', the ensuring market decline, and the subsequent investor indecisiveness have effects on foreign firenct investment in Asia, the EU, and North America (Devos & Giovanoli, 2011). While this situation continued, one particular economic bilaterlism, that of Japan and Australia, has remained largely unaffected. The bilateral trade volumes and structure between the two remain unaltered in the aftermath of the 'shock'. This paper details the Japanese foreign direct investment patterns in Australia that were present before the 'Lehman Brothers shock', and continued afterwards (i.e. several-stage type of acquisitions). From the time of the 'shock' until April 2010, there were numerous Japanese acquisitions in Australia (Wallace, 2010). This process has been continuing, as of December 2011, with Japanese MNE Inpex's A$30 billion foreign direct investment in LNG extraction and export project (AAP,2011; AFP, 2011). Nippon Paper Group's 2009 foreign direct investment in Australia was the ninth biggest Japanese global acquisition in that year (JETRO, 2010), and Mitsubishi Corporation's September 2008 foreign direct investment was the tenth largest (JETRO, 2009). The post-crisis business environment has been beset by uncertainties, and the global mergers and acquisitions had revovered to merely one third of 2007 levels by the end of 2010 (UNCTAD, 2011). This has been the global trend, the context of the discussion herein. As this paper discusses, the global trend, which UNCTAD describes, does not readily apply to the Japanese foreign direct investment in Australia. Paragragh Headings: 1. MNE framework and institutional economics 1.1. Douglas North and institutional economics 2. The state of foreign direct investment in the Australian market 3. Japanese foreign direct investment in Australia 4. Other MNE perspectives 5. Conclusion Tables: 1. Total foreign investment levels (A$ millison) at December 2010 2. The change in the composition of Australian GDP (%) 3. Labour market share of Australian industries (%) Figures: 1. Japanese global foreign direct investment change per annum (in%) 2. Japanese foreign direct investment in Australia (in AUD$) 3. Japanese foreign direct investment as percentage of all foreign investment in Australia (in%)