<p>One of likely many contributing factors is the definition of GDP.  Consider the humble iPhone, produced by Apple contractor FoxConn. FoxConn is headquartered in Taiwan, while Apple is headquartered in Cupertino, California, USA.</p>

<p>Apple owns the intellectual property that goes into the iPhone, and so iPhone sales to American citizens support growth in Apple stock.  But because the iPhone is produced offshore, when an American citizen buys a cell phone that buoys the stock of an American-domiciled company, it <em>does not</em> contribute to American GDP - it contributes to Chinese, or Taiwanese, or wherever the factory happens to be, and in fact <em>subtracts</em> from American GDP.</p>

CC BY-SA 4.0
2020-02-21T14:58:42.423Z
So the Japanese stocks listed in Nikkei have a lot of foreign sales  but less manufacturing in the country ?
whisperer
CC BY-SA 4.0
2020-02-21T15:29:43.237Z
I don't follow the Nikkei, but if this example does apply to Japan then you would have (for example) cars made by United States Toyota Manufacturing Kentucky contributing to US GDP, with any success by this arm of Toyota helping buoy Toyota's stock without contributing to Japanese GDP.
heh
CC BY-SA 4.0
2020-02-18T23:09:09.817Z
2020-02-18T23:09:09.817Z
heh
<p>I was looking at Japan: Japan's <a href="https://data.worldbank.org/indicator/NY.GDP.MKTP.CD?locations=JP" rel="nofollow noreferrer">GDP trajectory</a> and <a href="https://www.investing.com/indices/japan-ni225" rel="nofollow noreferrer">Nikkei 225</a>.
It seems from 2011 - 2015 the GDP contracted but the Nikkei has gone up. Would there be a good explanation for this ?</p>

<gdp><stock-market><japan>
Shouldn't national Stock Indices proportional to GDP of the country?
whisperer
# Shouldn't national Stock Indices proportional to GDP of the country?

(Asked by: username_0 on 2020-02-18)

I was looking at Japan: Japan's [GDP trajectory](https://data.worldbank.org/indicator/NY.GDP.MKTP.CD?locations=JP) and [Nikkei 225](https://www.investing.com/indices/japan-ni225).
It seems from 2011 - 2015 the GDP contracted but the Nikkei has gone up. Would there be a good explanation for this ?

**Tags:** gdp, stock-market, japan


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## 1 answers

### Answer by username_1 on 2020-02-18. Score: 1

One of likely many contributing factors is the definition of GDP. Consider the humble iPhone, produced by Apple contractor FoxConn. FoxConn is headquartered in Taiwan, while Apple is headquartered in Cupertino, California, USA.

Apple owns the intellectual property that goes into the iPhone, and so iPhone sales to American citizens support growth in Apple stock. But because the iPhone is produced offshore, when an American citizen buys a cell phone that buoys the stock of an American-domiciled company, it *does not* contribute to American GDP - it contributes to Chinese, or Taiwanese, or wherever the factory happens to be, and in fact *subtracts* from American GDP.

> **Comments:**
> **username_0**: So the Japanese stocks listed in Nikkei have a lot of foreign sales  but less manufacturing in the country ?  
> **username_1**: I don't follow the Nikkei, but if this example does apply to Japan then you would have (for example) cars made by United States Toyota Manufacturing Kentucky contributing to US GDP, with any success by this arm of Toyota helping buoy Toyota's stock without contributing to Japanese GDP.  

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