Outward FDI and Parent Exports and Employment: Japan, the United States, and Sweden
AbstractWithin Japanese multinational firms, parent exports from Japan to a foreign region are positively related to production in that region by affiliates of that parent, given the parent's home production in Japan and the region's size and income level. This relationship is similar to that found for Swedish and U.S. multinationals in parallel studies. A Japanese parent's worldwide exports tend to be larger, relative to its output, the larger the firm's overseas production. In this respect also, Japanese firms resembled U.S. multinationals. A Japanese parent's employment, given the level of its production, tends to be higher, the greater the production abroad by the firm's foreign affiliates. Japanese firms' behavior in this respect is similar to that of Swedish firms, but contrasts with that of U.S. firms. U.S. firms appear to reduce employment at home, relative to production, by allocating labor-intensive parts of their production to affiliates in developing countries. Swedish firms seem to allocate the more capital-intensive parts of their production to their foreign affiliates, mostly in high-wage countries. We conclude that in Japanese firms and ancillary employment at home to service foreign operations outweighs any allocation of labor-intensive production to developing countries.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 7623.
Date of creation: Mar 2000
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Publication status: published as Lipsey, Robert E., Eric D. Ramstetter and Mangus Blomstrom. "Outward FDI And Apparent Exports And Employment: Japan, The United States, And Sweden," Global Economy Journal, 2000, v1(4,Oct), Article 1.
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Find related papers by JEL classification:
- F14 - International Economics - - Trade - - - Empirical Studies of Trade
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
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- Blomström, Magnus & Fors, Gunnar & Lipsey, Robert E., 1997.
"Foreign Direct Investment and Employment: Home Country Experience in the United States and Sweden,"
Working Paper Series in Economics and Finance
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- Blomstrom, Magnus & Fors, Gunnar & Lipsey, Robert E, 1997. "Foreign Direct Investment and Employment: Home Country Experience in the United States and Sweden," Economic Journal, Royal Economic Society, vol. 107(445), pages 1787-97, November.
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- Blomström, Magnus & Fors, Gunnar & Lipsey, Robert E., 1997. "Foreign Direct Investment and Employment: Home Country Experience in the United States and Sweden," Working Paper Series 490, Research Institute of Industrial Economics.
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in: Trade Policy Issues and Empirical Analysis, pages 257-302
National Bureau of Economic Research, Inc.
- repec:fth:iniesr:490 is not listed on IDEAS
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- Robert E. Lipsey, 1999. "Foreign Production by U.S. Firms and Parent Firm Employment," NBER Working Papers 7357, National Bureau of Economic Research, Inc.
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