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The role of multinational firms in international trade: The case of Japan

  • Kiyota, Kozo
  • Urata, Shujiro

This paper examines the role of multinational firms in international trade using firm-level panel data for Japanese firms between 1994 and 2000. Our results indicate that multinational firms dominate Japanese trade. In 2000, only 12.4 percent of Japanese firms were multinationals but they accounted for 93.6 and 81.2 percent of Japanese exports and imports, respectively. We found that multinational firms emerged from being exporters/importers. These results imply that firms do not make the choice of either exporting or undertaking FDI, contrary to the findings of previous studies. Rather, exporters make a decision on whether or not to undertake FDI.

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File URL: http://www.sciencedirect.com/science/article/B6VF1-4N7S56C-2/1/a188e8baf03eac2f772e3ab94a430ae5
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Article provided by Elsevier in its journal Japan and the World Economy.

Volume (Year): 20 (2008)
Issue (Month): 3 (August)
Pages: 338-352

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Handle: RePEc:eee:japwor:v:20:y:2008:i:3:p:338-352
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/505557

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  3. Kozo Kiyota & Shujiro Urata, 2005. "The Role of Multinational Firms in International Trade: The Case of Japan," Discussion papers 05012, Research Institute of Economy, Trade and Industry (RIETI).
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  16. Lipsey, Robert E & Weiss, Merle Yahr, 1984. "Foreign Production and Exports of Individual Firms," The Review of Economics and Statistics, MIT Press, vol. 66(2), pages 304-08, May.
  17. Bruce A. Blonigen, 1999. "In Search of Substitution Between Foreign Production and Exports," NBER Working Papers 7154, National Bureau of Economic Research, Inc.
  18. Head, Keith & Ries, John, 2001. "Overseas Investment and Firm Exports," Review of International Economics, Wiley Blackwell, vol. 9(1), pages 108-22, February.
  19. Roberts, Mark J & Tybout, James R, 1997. "The Decision to Export in Colombia: An Empirical Model of Entry with Sunk Costs," American Economic Review, American Economic Association, vol. 87(4), pages 545-64, September.
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  22. Yamawaki, Hideki, 1991. "Exports and Foreign Distributional Activities: Evidence on Japanese Firms in the United States," The Review of Economics and Statistics, MIT Press, vol. 73(2), pages 294-300, May.
  23. Clausing, Kimberly A, 2000. "Does Multinational Activity Displace Trade?," Economic Inquiry, Western Economic Association International, vol. 38(2), pages 190-205, April.
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