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Networked FDI: Sales and Sourcing Patterns of Japanese Foreign Affiliates

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  • Baldwin, Richard
  • Okubo, Toshihiro

Abstract

Using firm-level data on the sales and sourcing patterns of Japanese affiliates, this paper suggests that very little FDI falls neatly into the standard bins of horizontal, vertical and export-platform FDI. Most affiliates import some intermediates and export some output suggesting a pattern that might be called ‘networked FDI’. This suggests that that the nature of FDI is influenced by ‘regional comparative advantage’ i.e. the proximity of markets and suppliers. The paper also suggests an empirical strategy for testing and classifying the nature of FDI based on firms’ sales and sourcing patterns rather than standard macro-level variables such as market size and income differences.

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Bibliographic Info

Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 8963.

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Date of creation: May 2012
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Handle: RePEc:cpr:ceprdp:8963

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Keywords: complex FDI; Japanese foreign affiliates; networked FDI; sales; sourcing; vertical and horizontal FDI;

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References

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  39. repec:fth:iniesr:430 is not listed on IDEAS
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Citations

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Cited by:
  1. THORBECKE, Willem & Nimesh SALIKE, 2013. "Foreign Direct Investment in East Asia," Policy Discussion Papers 13003, Research Institute of Economy, Trade and Industry (RIETI).
  2. JINJI Naoto & Xingyuan ZHANG, 2013. "Innovation in the Host Country and the Structure of Foreign Direct Investment: Evidence from Japanese multinationals," Discussion papers 13060, Research Institute of Economy, Trade and Industry (RIETI).
  3. ITO Tadashi, 2013. "FTA and Export Platform Foreign Direct Investment: Evidence from Japanese firm level data," Discussion papers 13100, Research Institute of Economy, Trade and Industry (RIETI).
  4. Kamran Bilir & Davin Chor & Kalina Manova, 2014. "Host-Country Financial Development and Multinational Activity," NBER Working Papers 20046, National Bureau of Economic Research, Inc.
  5. Nobuhiro Hosoe, 2013. "Japanese Manufacturing Facing the Power Crisis after Fukushima: A Dynamic Computable General Equilibrium Analysis with Foreign Direct Investment," GRIPS Discussion Papers 13-01, National Graduate Institute for Policy Studies.

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