IDEAS home Printed from https://ideas.repec.org/p/eti/dpaper/07063.html
   My bibliography  Save this paper

International Production/Distribution Networks and Domestic Operations in terms of Employment and Corporate Organization: Microdata Analysis of Japanese Firms

Author

Listed:
  • ANDO Mitsuyo
  • KIMURA Fukunari

Abstract

This paper empirically investigates patterns of globalizing corporate activities and their domestic operations and trade, using firm-level panel data on Japanese firms in 1998-2003. Journalistic literature in North America and Europe often claims that the globalization of corporate activities, particularly the expansion of operations in less-developed countries, is prone to reduce domestic corporate activities. This paper proves that such a claim of industrial hollowing-out is unwarranted, at least at the firm level, in the case of Japanese manufacturing firms investing in East Asia. The manufacturing sector in Japan has had a secular trend of reducing domestic employment in the past decades. The regression analysis, however, finds that manufacturing firms expanding operations in East Asia are more likely to increase domestic employment than other manufacturing firms, while non-manufacturing firms, mostly in the wholesale sector, do not present such a significant pattern; the growth of domestic employment of globalizing manufacturing firms is higher by as much as three to eight percent. As for domestic establishments and affiliates, manufacturing firms expanding operations in East Asia do not present any statistically significant differences from other manufacturing firms, while non-manufacturing firms tend to reduce it. Furthermore, firms expanding operations in East Asia tend to intensify export/import activities with East Asia more than other firms, suggesting the complementarity between trade and FDI. This is further supporting evidence for expanding fragmentation of production by Japanese firms and their involvement in further development of production/distribution networks in East Asia. Overall, Japanese manufacturing firms globalizing corporate activities seem to retain larger domestic operations than other firms. Such tendency is actually stronger in machinery industries in which international production/distribution networks are actively extended.

Suggested Citation

  • ANDO Mitsuyo & KIMURA Fukunari, 2007. "International Production/Distribution Networks and Domestic Operations in terms of Employment and Corporate Organization: Microdata Analysis of Japanese Firms," Discussion papers 07063, Research Institute of Economy, Trade and Industry (RIETI).
  • Handle: RePEc:eti:dpaper:07063
    as

    Download full text from publisher

    File URL: https://www.rieti.go.jp/jp/publications/dp/07e063.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. 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 1787-1797, November.
    2. Keiko Ito & Kyoji Fukao, 2005. "Physical and Human Capital Deepening and New Trade Patterns in Japan," NBER Chapters,in: International Trade in East Asia, NBER-East Asia Seminar on Economics, Volume 14, pages 7-52 National Bureau of Economic Research, Inc.
    3. Paul A. Samuelson, 2004. "Where Ricardo and Mill Rebut and Confirm Arguments of Mainstream Economists Supporting Globalization," Journal of Economic Perspectives, American Economic Association, vol. 18(3), pages 135-146, Summer.
    4. Ando, Mitsuyo, 2006. "Fragmentation and vertical intra-industry trade in East Asia," The North American Journal of Economics and Finance, Elsevier, vol. 17(3), pages 257-281, December.
    5. Alexander Hijzen & Holger Görg & Robert C. Hine, 2005. "International Outsourcing and the Skill Structure of Labour Demand in the United Kingdom," Economic Journal, Royal Economic Society, vol. 115(506), pages 860-878, October.
    6. repec:hhs:iuiwop:490 is not listed on IDEAS
    7. Takatoshi Ito & Andrew K. Rose, 2005. "International Trade in East Asia, NBER-East Asia Seminar on Economics, Volume 14," NBER Books, National Bureau of Economic Research, Inc, number ito_05-1.
    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. Mia Mikic & Mochamad Pasha (ed.), 2011. "Fighting Irrelevance: The Role of Regional Trade Agreements in International Production Networks in Asia," STUDIES IN TRADE AND INVESTMENT, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), number tipub2597.
    2. EDAMURA Kazuma & Laura HERING & INUI Tomohiko & Sandra PONCET, 2011. "The Overseas Subsidiary Activities and Their Impact on the Performance of Japanese Parent Firms," Discussion papers 11069, Research Institute of Economy, Trade and Industry (RIETI).

    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:eti:dpaper:07063. 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: (KUMAGAI, Akiko). General contact details of provider: http://edirc.repec.org/data/rietijp.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.