Abstract
Foreign direct investments by Japanese companies that focus on the cost reduction in the manufacturing process and the development of new markets have been increasing in ASEAN countries, especially after the yen appreciation since 2008. Under this background, the number of Japanese small and medium sized companies has been dramatically increasing since 2011. This paper describes 1） the situation of foreign direct investment in Cambodia, 2） the key factors of foreign direct investment by Japanese companies, and 3） the management strategy of Japanese small and medium sized companies in Cambodia. In the manufacturing sector, the main purpose of companies is categorized into 1） establishment of the increase production base, 2） vertical diversification, 3） horizontal diversification, 4） enjoyment of the tax incentives, 5） expansion of the domestic market, and 6） acquisition of the natural resources. Most of manufacturing companies in charge of export processing are located at the Phnom Penh Metropolitan area. In the service sector, related to B to B business, main customers are also Japanese companies in Cambodia, and related to B to C business, main customers are Japanese and consumers in the domestic market. Foreign direct investments by Japanese SMEs would be continuously increasing under the achievement of the AFTA scheme, and the development of human resources and infrastructures.
