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Is Japan still being hollowed out?

Outward investment from Japan has soared in recent years but this doesn’t seem to have been to the detriment of domestic manufacturing. This isn’t entirely surprising: firms say their main reason for setting up shop overseas is to be closer to customers rather than, for example, to take advantage of lower wages. The recent surge in outward investment has in fact mostly been to high income countries, as well as outside manufacturing.

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