Industrial groupings and foreign direct investment
AbstractWe explore worldwide foreign direct investment location decisions by Japanese manufacturing firms from 1985 through 1991. Our conditional logit estimates provide evidence that firms’ location decisions are affected by membership in either vertical or horizontal keiretsu. Consistent with previous studies that stress agglomeration effects on firms’ location decisions, we find that the stock of investment in a region by a firm’s vertical keiretsu partners increases the probability of location. Further, we find that the recent flow of investment into a region by a firm’s horizontal keiretsu partners increases the probability of investment to the region, providing evidence of networking effects.
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Bibliographic InfoPaper provided by University of Oregon Economics Department in its series University of Oregon Economics Department Working Papers with number 2003-19.
Date of creation: 01 Mar 2003
Date of revision: 01 Mar 2003
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Other versions of this item:
- Blonigen, Bruce A. & Ellis, Christopher J. & Fausten, Dietrich, 2005. "Industrial groupings and foreign direct investment," Journal of International Economics, Elsevier, vol. 65(1), pages 75-91, January.
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
- G3 - Financial Economics - - Corporate Finance and Governance
This paper has been announced in the following NEP Reports:
- NEP-DCM-2003-09-14 (Discrete Choice Models)
- NEP-IFN-2003-09-14 (International Finance)
- NEP-MIC-2003-09-14 (Microeconomics)
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