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Where at home do exporters produce and export?

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  • Kyoko Hirose
  • Yushi Yoshida

Abstract

Foreign growth can induce changes in production structures across domestic regions through international trade. With a two†country model with the explicit incorporation of two regions in the home country, we show that effects of foreign growth on exports and production to be possibly asymmetric among home regions. This foreign†growth effect is especially prominent in Asia with China emerging as the largest trading country. We empirically test our theoretical hypothesis with the data set of Japanese regions. We find evidence that the growth of Asian countries leads to a change in the regional structure of exports and production in Japan. With respect to an adjacent Asian country, the growth of a foreign country exerts opposite effects on production among Japanese regions.

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  • Kyoko Hirose & Yushi Yoshida, 2018. "Where at home do exporters produce and export?," The World Economy, Wiley Blackwell, vol. 41(6), pages 1596-1639, June.
    • Handle: RePEc:bla:worlde:v:41:y:2018:i:6:p:1596-1639
    DOI: 10.1111/twec.12588
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    More about this item

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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