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The Vertical Division of Labor and Japanese Outward FDI: Impacts on Human Capital Deepening in Japan (in Japanese)


  • Keiko Ito
  • Kyoji Fukao


This paper empirically examines the impact of recent changes in Japan's trade patterns on domestic factor markets. According to our factor content analysis, Japan's net-exports changed in a direction that Japan has come to export more physical and human capital-intensive products over the past two decades. On the other hand, a major part of the macro-economic change in the capital-labor ratio and the change in the skilled-labor ratio can be attributed to a within-industry shift rather than a between-industry shift. Our empirical analysis provided evidence that the deepening of international division of labor contributed to skill upgrading in Japan. Vertical intra-industry trade and outward FDI had a strong positive effect on the increase in the share of skilled workers.

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  • Keiko Ito & Kyoji Fukao, 2005. "The Vertical Division of Labor and Japanese Outward FDI: Impacts on Human Capital Deepening in Japan (in Japanese)," Hi-Stat Discussion Paper Series d05-115, Institute of Economic Research, Hitotsubashi University.
  • Handle: RePEc:hst:hstdps:d05-115

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    References listed on IDEAS

    1. Neumark, David & Postlewaite, Andrew, 1998. "Relative income concerns and the rise in married women's employment," Journal of Public Economics, Elsevier, vol. 70(1), pages 157-183, October.
    2. Jeremy Greenwood & Ananth Seshadri & Mehmet Yorukoglu, 2005. "Engines of Liberation," Review of Economic Studies, Oxford University Press, vol. 72(1), pages 109-133.
    3. Alessandra Fogli & Raquel Fernandez, 2009. "Culture: An Empirical Investigation of Beliefs, Work, and Fertility," American Economic Journal: Macroeconomics, American Economic Association, vol. 1(1), pages 146-177, January.
    4. Datcher-Loury, Linda, 1988. "Effects of Mother's Home Time on Children's Schooling," The Review of Economics and Statistics, MIT Press, vol. 70(3), pages 367-373, August.
    5. Raquel Fernández & Alessandra Fogli & Claudia Olivetti, 2004. "Mothers and Sons: Preference Formation and Female Labor Force Dynamics," The Quarterly Journal of Economics, Oxford University Press, vol. 119(4), pages 1249-1299.
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    Cited by:

    1. Sanghoon Ahn & Kyoji Fukao & Keiko Ito, 2008. "The Impact of Outsourcing on the Japanese and South Korean Labor Markets: International Outsourcing of Intermediate Inputs and Assembly in East Asia," Global COE Hi-Stat Discussion Paper Series gd08-001, Institute of Economic Research, Hitotsubashi University.
    2. Margit Molnar & Przemyslaw Kowalski, 2008. "Economic impacts of the phase-out in 2005 of quantitative restrictions under the Agreement on textiles and Clothing," STUDIES IN TRADE AND INVESTMENT,in: Unveiling Protectionism: Regional Responses to Remaining Barriers in the Textiles and Clothing Trade, pages 49-83 pag United Nations Economic and Social Commission for Asia and the Pacific (ESCAP).
    3. Castellani, Davide & Mariotti, Ilaria & Piscitello, Lucia, 2008. "The impact of outward investments on parent company's employment and skill composition: Evidence from the Italian case," Structural Change and Economic Dynamics, Elsevier, vol. 19(1), pages 81-94, March.
    4. Hitoshi Sasaki, 2007. "Import Competition and Manufacturing Employment in Japan," Bank of Japan Working Paper Series 07-E-25, Bank of Japan.

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