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The objective of this research is to identify the characteristics of small and medium enterprises (SMEs) engaging in outward foreign direct investment (FDI) from Japan. From the perspectives of transaction cost economics and network theory, we compare between exporting SMEs with outward FDI and those without outward FDI in foreign countries from Japan. To this end, we investigate interview based case study articles by using text mining technique with statistical analysis. The results from the binominal logistic models show that the variables associated with the two theories have no relevance to the SMEs conducting FDI whilst the other variables such as the number of destination countries for export and industry sectors have greater explanatory power to distinguish between the SMEs with FDI and those without FDI.