Foreign direct investment is a category of cross-border investment which

associated with a resident in one economy having control of influence on the

management of an enterprise that is resident in another economy which is not based on

the nationality of the direct. Foreign direct investment is done in every industry (Yce, &

Zelaya, 2014). FDI leads to overall improvement in the standard of living in the host

country, as well as, increasing its access to and competitiveness in world markets

(Czinkot, 2015). In present days FDI is in increasing order because of globalization.

Simply Gross capital formation summarized the total capital invested in industry,

company's office building a so on.

FDI formed 24% of gross fixed capital formation in Ireland and only 0.6% in

Japan implies FDI is the key source for investment capital making economy growth for

Ireland than Japan. Companies may perceive that Ireland is more attractive and right

place for their investment or that it is easier to establish operation in Ireland than in

Japan. The industries in Ireland were getting the employee and worker in low cost and the

people's are well educated so, they didn't need training for long time duration. Similarly

in Japan workforce is also well-educated but the workforce is more expensive as

compared to Ireland. Japan should be concerned on improving labor market flexibility

and corporate governance as well as transparency. FDI has widespread benefits like it

cannot only raise growth through higher investment, but also through improvements in

productivity. Ireland is an expensive place to do business when compared to some other

EU destinations. Cost of labor, transportation, utilities and property costs remain high.

Therefore, due to the reasons above the FDI of Japan is comparatively lower than

that of Ireland.
 References:

Yce, A., & Zelaya, M. (2014). FOREIGN DIRECT INVESTMENT DECISIONS OF

MULTINATIONAL COMPANIES. Journal of Global Business and

Technology,10(1), 38-61. Retrieved from https://search-proquest-com.ezp-

01.lirn.net/docview/1557092989? accountid=158986

Czinkot, M. (2015). Pros and Cons of Foreign Direct Investment. Fundamentals of

International Business , 60.