IDEAS home Printed from https://ideas.repec.org/p/eab/microe/21886.html
   My bibliography  Save this paper

Production Networks in East Asia : Strategic Behavior by Japanese and U.S. firms

Author

Listed:
  • Mitsuyo Ando

    (Hitotsubashi University, Lowe Institute of Political Economy, Claremont McKenna College, Keio University)

  • Sven W. Arndt
  • Fukunari Kimura

Abstract

This paper investigates production networks in East Asia, focusing on strategic behavior by Japanese and U.S. firms, to discuss implications of the production sharing and fragmentation and of the role of MNEs in creating and coordinating the activities within production networks. For that purpose, our study first theoretically examines the effect of fragmentation and the issues from the viewpoint of firms and then empirically analyzes the activities of Japanese and U.S. firms not only in developing East Asia but also in Latin America. Our empirical findings indicate that the regional investment climate is more important in promoting production networks than differences in firm nationalities. In East Asia, both Japanese and U.S. firms display very similar patterns in exploiting the international division of labor extended and both present close links between geographical proximity and arms length fragmentation. On the other hand, such patterns for both firms are very different in Latin America, suggesting that the explanation lies in differences between the two regions. This finding has various important implications for policy makers.

Suggested Citation

  • Mitsuyo Ando & Sven W. Arndt & Fukunari Kimura, 2006. "Production Networks in East Asia : Strategic Behavior by Japanese and U.S. firms," Microeconomics Working Papers 21886, East Asian Bureau of Economic Research.
  • Handle: RePEc:eab:microe:21886
    as

    Download full text from publisher

    File URL: http://www.eaber.org/node/21886
    Download Restriction: no

    References listed on IDEAS

    as
    1. Gene M. Grossman & Elhanan Helpman, 2005. "Outsourcing in a Global Economy," Review of Economic Studies, Oxford University Press, vol. 72(1), pages 135-159.
    2. Kimura, Fukunari & Ando, Mitsuyo, 2003. "Fragmentation and agglomeration matter: Japanese multinationals in Latin America and East Asia," The North American Journal of Economics and Finance, Elsevier, vol. 14(3), pages 287-317, December.
    3. Elhanan Helpman & Marc J. Melitz & Stephen R. Yeaple, 2004. "Export Versus FDI with Heterogeneous Firms," American Economic Review, American Economic Association, vol. 94(1), pages 300-316, March.
    4. Hummels, David & Ishii, Jun & Yi, Kei-Mu, 2001. "The nature and growth of vertical specialization in world trade," Journal of International Economics, Elsevier, vol. 54(1), pages 75-96, June.
    5. Richard Baldwin, 2005. "Heterogeneous Firms and Trade: Testable and Untestable Properties of the Melitz Model," NBER Working Papers 11471, National Bureau of Economic Research, Inc.
    6. Arndt, Sven W., 1997. "Globalization and the open economy," The North American Journal of Economics and Finance, Elsevier, vol. 8(1), pages 71-79.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Takeuchi, Fumihide, 2011. "The role of production fragmentation in international business cycle synchronization in East Asia," Journal of Asian Economics, Elsevier, vol. 22(6), pages 441-459.
    2. Kimura, Fukunari & Obashi, Ayako, 2011. "Production Networks in East Asia: What We Know So Far," ADBI Working Papers 320, Asian Development Bank Institute.
    3. Sven W. Arndt, 2007. "Doha Development Round: Reaching Beyond Trade Liberalization," Pacific Economic Review, Wiley Blackwell, vol. 12(3), pages 381-394, August.
    4. Mitsuyo ANDO & Fukunari KIMURA, 2013. "What Are the Opportunities and Challenges for ASEAN?," Working Papers DP-2013-31, Economic Research Institute for ASEAN and East Asia (ERIA).
    5. Mitsuyo ANDO, 2013. "Impact of Recent Crises and Disasters on Regional Production/Distribution Networks and Trade in Japan," Working Papers DP-2013-12, Economic Research Institute for ASEAN and East Asia (ERIA).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eab:microe:21886. 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: (Shiro Armstrong). General contact details of provider: http://edirc.repec.org/data/eaberau.html .

    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 CitEc recognized a reference but did not link an item in RePEc 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.