JAPANESE FDI INTO THE US AUTOMOBILE-INDUSTRY - AN EMPIRICAL-INVESTIGATION

I empirically examine the decisions of the Japanese automobile compani es to enter the U.S. market as direct investors given that they are cu rrently exporting to this market. In particular, I am interested in le arning how trade restrictions, in addition to U.S. policies and market conditions, affect these investment decisions. A two-step estimation procedure is used to account for the possible endogeneity of company e xport levels on the investment decisions.