Foreign direct investment and China's bilateral intra-industry trade with Japan and the US
This paper analyzes dynamic changes of China's intra-industry trade with its major trading partners, Japan and the US, from 1980 to 2004.It also investigates to what extent foreign direct investment promoted intra-industry trade.The empirical results show that, while shares of China's intra-industry trade with both Japan and U.S rose substantially, its intraindustry trade with Japan has reached 35 per cent of the overall trade, considerably larger than 10 per cent with the US.Sino-Japan intra-industry trade concentrated in the electrical and machinery sectors accounted for 52 per cent and 46 per cent of overall trade respectively.On the other hand, it is in the chemical and food sectors where intra-industry trade represented a relatively large proportion of Sino-US trade, 50 per cent and 30 per cent accordingly in each sector.In addition, the analysis indicates that Japanese direct investment in China performed a significant role in enhancing intra-industry trade between Japan and China.However, it found no evidence that the US direct investment in China contributed to the growth of the bilateral intra-industry trade between the two countries. JEL:F14, F23 Key Words: Intra-industry trade, FDI, China
|Date of creation:||16 Jan 2007|
|Publication status:||Published in Published in Journal of Asian Economics, Volume 18, Issue 4, August 2007, Pages 685-700|
|Contact details of provider:|| Postal: Bank of Finland, BOFIT, P.O. Box 160, FI-00101 Helsinki, Finland|
Phone: + 358 9 183 2268
Fax: + 358 9 183 2294
Web page: http://www.bofit.fi/en/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Yuqing Xing & Guanghua Wan, 2006. "Exchange Rates and Competition for FDI in Asia," The World Economy, Wiley Blackwell, vol. 29(4), pages 419-434, April.
- Balassa, Bela, 1986. "Intra-Industry specialization : A cross-country analysis," European Economic Review, Elsevier, vol. 30(1), pages 27-42, February.
- Falvey, Rodney E., 1981. "Commercial policy and intra-industry trade," Journal of International Economics, Elsevier, vol. 11(4), pages 495-511, November.
- Fukao, Kyoji & Ishido, Hikari & Ito, Keiko, 2003.
"Vertical intra-industry trade and foreign direct investment in East Asia,"
Journal of the Japanese and International Economies,
Elsevier, vol. 17(4), pages 468-506, December.
- Kyoji Fukao & Hikari Ishido & Keiko Ito, 2003. "Vertical Intra-Industry Trade and Foreign Direct Investment in East Asia," Discussion papers 03001, Research Institute of Economy, Trade and Industry (RIETI).
- Fukao, Kyoji & Ishido, Hikari & Ito, Keiko, 2003. "Vertical Intra-Industry Trade and Foreign Direct Investment in East Asia," Discussion Paper Series a434, Institute of Economic Research, Hitotsubashi University.
- Pol Antràs, 2003. "Firms, Contracts, and Trade Structure," The Quarterly Journal of Economics, Oxford University Press, vol. 118(4), pages 1375-1418.
- Wakasugi, R., 1997. "Missing factors of intra-industry trade: Some empirical evidence based on Japan," Japan and the World Economy, Elsevier, vol. 9(3), pages 353-362, August.
- XING, Yuqing, 2006.
"Why is China so attractive for FDI? The role of exchange rates,"
China Economic Review,
Elsevier, vol. 17(2), pages 198-209.
- Yuqing Xing, 2004. "Why is China so Attractive for FDI The Role of Exchange Rates," Working Papers EMS_2004_04, Research Institute, International University of Japan.
- Toshihiro Okubo, 2004. "Intra-industry Trade and Production Networks," IHEID Working Papers 13-2004, Economics Section, The Graduate Institute of International Studies.
- Xiaoling Hu & Yue Ma, 1999. "International intra-industry trade of China," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 135(1), pages 82-101, March.
- Nicolas R Blancher & Thomas Rumbaugh, 2004. "China; International Trade and WTO Accession," IMF Working Papers 04/36, International Monetary Fund.
- Michael Thorpe & Zhaoyang Zhang, 2005. "Study of the Measurement and Determinants of Intra-industry Trade in East Asia ," Asian Economic Journal, East Asian Economic Association, vol. 19(2), pages 231-247, June.
- Don Clark, 1993. "Recent evidence on determinants of intra-industry trade," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 129(2), pages 332-344, June.
- Lisbeth Hellvin, 1996. "Vertical Intra-Industry Trade Between China and OECD Countries," OECD Development Centre Working Papers 114, OECD Publishing.
- Jianhong Zhang & Arjen van Witteloostuijn & Chaohong Zhou, 2005. "Chinese Bilateral Intra-Industry Trade: A Panel Data Study for 50 Countries in the 1992–2001 Period," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 141(3), pages 510-540, October.
When requesting a correction, please mention this item's handle: RePEc:bof:bofitp:2007_001. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Minna Nyman)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.