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Reconsidering the Backward Vertical Linkages of Foreign Affiliates: Evidence from Japanese Multinationals

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  • Kiyota, Kozo
  • Matsuura, Toshiyuki
  • Urata, Shujiro
  • Wei, Yuhong

Abstract

Summary This paper examines the determinants of the backward vertical linkages of Japanese foreign affiliates in manufacturing for the period 1994-2000, focusing on the local backward linkages, or local procurement in the host country. Our major findings are twofold. First, the unobserved affiliate-specific characteristics explain the large part of the variation of the backward linkages among foreign affiliates. Second, the experience of the affiliate has positive and sometimes nonlinear effects on local procurement for the affiliates, especially in Southeast Asia and China.

Suggested Citation

  • Kiyota, Kozo & Matsuura, Toshiyuki & Urata, Shujiro & Wei, Yuhong, 2008. "Reconsidering the Backward Vertical Linkages of Foreign Affiliates: Evidence from Japanese Multinationals," World Development, Elsevier, vol. 36(8), pages 1398-1414, August.
    • Handle: RePEc:eee:wdevel:v:36:y:2008:i:8:p:1398-1414
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    More about this item

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory

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