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A Two-dimensional Analysis of the Impact of Outward FDI on Performance at Home: Evidence from Japanese Manufacturing Firms

  • Ayako Obashi

    (Faculty of Economics, Keio University)

  • Kazunobu Hayakawa

    (Inter-disciplinary Studies Center, Institute of Developing Economies)

  • Toshiyuki Matsuura

    (Institute of Economic and Industrial Studies, Keio University)

  • Kazuyuki Motohashi

    (Department of Technology Management for Innovation, School of Engineering, The University of Tokyo)

This paper empirically investigates two areas of changes in firm behavior and performance at home before and after investing abroad. The first is the type of foreign direct investment (FDI): horizontal FDI or vertical FDI. The second is the firm's domestic activities of interest: production activity and non-production activity. From a theoretical standpoint, the impact of outward FDIs differs not only by type, but according to the firm's activities. By exploiting two types of firm-level data that enable us to distinguish between production and non-production activities, our work provides a detailed picture of the intra-firm changes in behavior and performance that occur as a result of globalizing production.

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Paper provided by Keio/Kyoto Joint Global COE Program in its series Keio/Kyoto Joint Global COE Discussion Paper Series with number 2010-005.

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Length: 29 pages
Date of creation: 2010
Date of revision:
Handle: RePEc:kei:dpaper:2010-005
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