Japanese micro, small and medium enterprises (MSMEs) in ASEAN

The main objective of the paper is to indicate the role of the Japanese MSMEs in ASEAN, major drivers, strategies and destinations of their internationalization through FDI within the region, including home market’s institutional support. The following research methods were used: primary source analysis, descriptive statistical analysis, comparative analysis, and case studies. When studying motives of entry into markets of Southeast Asia, it appears that Japanese businesses are mostly market- and/or efficiency-seeking, appreciating ASEAN for both rising market potential and inexpensive labour forces. As for now, internationalization of the Japanese MSMEs through FDI used to concentrate in five ASEAN member states, namely, Indonesia, Malaysia, Singapore, Thailand and Viet Nam, mostly in automotive and electronics industry, however, further progress of trade liberalization and improvement of intra-regional physical connectivity would benefit other countries and sectors in the future.