THE PROMOTIONAL ROLES OF THE STATE GOVERNMENT AND JAPANESE MANUFACTURING DIRECT-INVESTMENT IN THE UNITED-STATES

Japanese direct investment in the United States has dramatically incre ased in the 1980s, particularly since 1985. Of all the Japanese direct investment in the United States, more than 60% occurred in the second half of the decade. However, little is known about the roles that eac h of the 50 states plays in locating Japanese investment in the state. Anecdotes of the roles that some state governments play in attracting major Japanese investments are not sufficient to understand the effec tiveness of various promotional measures. In this article, I examine t he effectiveness of various promotional measures. An unexpected findin g is reported: state government's export promotional activities are ef fective in attracting Japanese investments, while measures meant to at tract them are not. Japanese firms have some preferred investment loca tions that seem weakly but positively influenced by the presence of pe er Japanese firms preceding them.