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Quantitative Evaluation of Determinants of Export and FDI: Firm-level evidence from Japan

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  • TODO Yasuyuki

Abstract

This paper examines determinants of the export and FDI decision, using firm-level data for Japan. Contributions of this paper are twofold. First, this paper employs a mixed logit model to incorporate unobserved characteristics of firms. Second, special attention is paid to quantitative evaluation of effects of the covariates. We find that the impact of productivity on the export and FDI decision is positive and statistically significant but economically negligible in size, despite the theoretical prediction of recent heterogeneous-firm trade models. The impact of the firm size and information spillovers from experienced neighboring firms in the same industry are also positive but small in size. Quantitatively, the dominant determinants of the export and FDI decision are firms' status on internationalization in the previous year and unobserved firm characteristics. The evidence suggests that there may be some kind of inefficiency in the selection process of exporters and FDI firms.

Suggested Citation

  • TODO Yasuyuki, 2009. "Quantitative Evaluation of Determinants of Export and FDI: Firm-level evidence from Japan," Discussion papers 09019, Research Institute of Economy, Trade and Industry (RIETI).
  • Handle: RePEc:eti:dpaper:09019
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    References listed on IDEAS

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    Cited by:

    1. Ichiro Tokutsu & Kazuo Ogawa & Mika Saito, 2012. "Japan out of the Lost Decade; Divine Wind or Firms’ Effort?," IMF Working Papers 12/171, International Monetary Fund.
    2. Arita, Shawn & Tanaka, Kiyoyasu, 2011. "Simulating heterogeneous multinational firms," IDE Discussion Papers 296, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    3. Codruța Dura & Oana Dobre-Baron, 2011. "Analysis of Foreign Direct Investments Engaged by Japanese Multinational Companies," Annals of the University of Petrosani, Economics, University of Petrosani, Romania, vol. 11(2), pages 81-92.
    4. ITO Koji, 2011. "FDI in Emerging Economies: An analysis in a firm heterogeneity model," Discussion papers 11055, Research Institute of Economy, Trade and Industry (RIETI).
    5. Keiko ITO, 2012. "Sources of Learning-by-Exporting Effects: Does Exporting Promote Innovation?," Working Papers DP-2012-06, Economic Research Institute for ASEAN and East Asia (ERIA).
    6. Joachim Wagner, 2012. "International trade and firm performance: a survey of empirical studies since 2006," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 148(2), pages 235-267, June.
    7. TODO Yasuyuki & SATO Hitoshi, 2011. "Effects of CEOs' Characteristics on Internationalization of Small and Medium Enterprises in Japan," Discussion papers 11026, Research Institute of Economy, Trade and Industry (RIETI).

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