Japanese FDI in Ireland - A new Perspective using Kano

Location Specific Determinants Of

Foreign Direct Investment

Ronan Coy Fujitsu Ireland

Kathryn Cormican NUI GalwayImage Source: Flickrcc.com

An Exploratory Study Of Japanese Investment In

Ireland

What is Foreign Direct Investment?

SITUATIONRESOLUTI

ONCOMPLICATION

2

THE RESEARCH OBJECTIVE

3

THE LITERATURE

4

THE RESEARCH METHODOLOGY

5

THE FINDINGS

6

THE CONCLUSION

1

THE PROBLEM

SITUATION RESOLUTION

COMPLICATION

SITUATIONRESOLUTION

COMPLICATION

1

THE PROBLEM

THE U.S. IS THE WORLD’S

LARGEST ECONOMY

Source: CIA, 2012

JAPAN IS THE WORLD’S 4TH LARGEST ECONOMY

Source: CIA, 2012

% of FDI in Ireland by Employment

Source: Ireland Central Statistics Office , 2010

SITUATION RESOLUTIONCOMPLICATION

2


1

THE PROBLEM

To Find The Location-Specific

Factors That Influence The

Decision By Japanese

Firms To Invest In Ireland

Image Source: PresenterMedia.com


2


3

THE LITERATURE

1

THE PROBLEM

LITERATURE FOCUSED ON INVESTMENT

FROM U.S. FIRMS WITH LITTLE RESEARCH ON

JAPAN

LOTS OF INVESTMENT PRIORITY LISTS

WITHOUT UNDERSTANDING INVESTOR

SATISFACTION

The Literature Highlights

23 FDI Factors

Image Source: Slideshare.net

WITH LOTS OF READING A PATTERN OF

BASIC, PERFORMANCE & DELIGHTER

FACTORS “JUMPS OUT”

Delighter

Source: Adapted from [Lai and Wu 2011], [Yang 2005], [Kano, et al. 1984], [Berger, et al. 1993]

THIS PATTERN IS THE KANO MODEL OF QUALITY AND SATISFACTION


2


3

THE LITERATURE

4


1

THE PROBLEM

Quantitative Research Approach WITH ONLINE

SURVEY

X

Y

WLarger = More Important Factor

Importance

Three Dimensions of the Adapted Kano Model


2


3

THE LITERATURE

4


5

THE FINDINGS

1

THE PROBLEM

TOP 5 FACTORS By

Combined ImportanceTax

Skills

Political Stability

Regional Market

Government Role

62%

54%

46%

38%

38%

KANO PLOT FOUND “CONSTELLATION

S” Of Important FDI Factors

“PEOPLE QUALITY TRIANGLE” Suggests Japanese Investors Find Quality People Both

Important And Satisfying

DysfunctionalIncreasing Dissatisfaction if

Reduced

FunctionalIncreasing Satisfactio

n if Increased

“THE RISK SPIRE” Suggests Japanese Investors Are Risk Averse


Reduced


n if Increased

“THE GOVERNMENT WEB” Suggests Japanese Investors Value

Stable & Business-Focused Government


Reduced


n if Increased

“THE INDUSTRIAL DEVELOPMENT CIRCLE”

Suggests Long Term Industrial Strategy is Important but not a

Primary Satisfier


Reduced


n if Increased

SITUATIONRESOLUTI

ONCOMPLICATION

2


3

THE LITERATURE

4


5

THE FINDINGS

6

THE CONCLUSION

1

THE PROBLEM

1. Japanese Investment Factors

Are More Complex Than Simple Rankings

Kano

2. Japanese Investors

Share Similarities With US Firms

Low Cost Overheads Where Quality Infrastructure & Tax Policies Reduce Operating Costs

An Open Economy With Trade Links And & Access To Regional Markets

High Levels Of Productivity, With A Skilled And Educated Workforce

Source: McDonalds.com

3. Japanese Investors

Are Different To US FirmsIn Ireland

Source: Flickrcc.com

3a. They Seek StabilityBoth Politically

And Economically

And Low Levels Of Corruption

3b. They Value Long-TermIndustrial

Development Policies

SO, WHAT DID ALL THIS CONTRIBUTE TO KNOWLEDGE

OF FDI

UNDERSTANDING FDI INVESTOR SATISFACTION

USING KANO PROVIDES A NEW WAY TO LOOK AT

INVESTMENT

It is possible for Ireland to FOCUS LIMITED FUNDS ON STRATEGIC AREAS OF FDI Policy Development

SITUATIONRESOLUTI

ONCOMPLICATION

2


3

THE LITERATURE

4


5

THE FINDINGS

6

THE CONCLUSION

1

THE PROBLEM

Any questions contact me Twitter: @ronancoyEmail: [email protected]