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Survey of Trends in Business Activities of Foreign Affiliates

Summary of the 1999(33rd) Survey of Trends in Business Activities of Foreign Affiliates (Gist)

Key findings of the survey

  • In FY1998 the number of foreign affiliates newly established fell for the second straight year to 73. The number declined especially in the non-manufacturing sector. Most of the newly established affiliates are 100%-owned subsidiaries. The number of foreign affiliates withdrawn fell by 7 to 86. Most of the foreign affiliates newly established or withdrawn were enterprises with a capital of 100 million yen or less. As for existing foreign affiliates, capital per enterprise is on an upward trend, showing that they are boosting capitalization.
  • In FY1998, although foreign affiliates still exceeded Japanese enterprises in profitability, their profit fell for the third consecutive year and the ratio of profit to sales declined for the second straight year because sales took a downturn. In addition, capital investment decreased 22.8% from the previous year. Thus, business conditions of foreign affiliates are deteriorating. In FY1999, however, sales are expected to increase by about 2% in both the manufacturing and non-manufacturing sectors.
  • Payments to foreign investors rose for the fifth consecutive year. Although royalties fell for the first time in five years, dividends increased remarkably. In spite of severe business conditions, returns are still on an upward trend.
  • According to the survey in the fall of 1999, the number of foreign affiliates planning "expansion of busines" or "diversification of business" considerably increased from the previous year. While the Japanese economy is gradually recovering, foreign affiliates are expanding business plans, which were reduced in FY1997-98.

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July 2000

MINISTRY of INTERNATIONAL TRADE and INDUSTRY
ENTERPRISE STATISTICS DIVISION RESEACH and STATISTICS DEPARTMENT,
INTERNATIONAL BUSINESS AFFAIRS DIVISION INDUSTRIAL POLICY BUREAU

E-Mail:qqcebh@meti.go.jp

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Last Update: January 31, 2008
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