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The Role of Multinational Firms in International Trade: The Case of Japan

  • Kozo Kiyota

    (Gerald R. Ford School of Public Policy, University of Michigan)

  • Shujiro Urata

    (Graduate School of Asia-Pacific Studies, Waseda University)

This paper examines the role of multinational firms in international trade using firm-level panel data for Japanese firms between 1994 and 2000. Our results indicate that multinational firms dominate Japanese trade. In 2000, only 12.4 percent of Japanese firms were multinationals but they accounted for 93.6 and 81.2 percent of Japanese exports and imports, respectively. We found that multinational firms emerged from being exporters/importers. These results imply that firms do not make the choice of either exporting or undertaking FDI, contrary to the findings of previous studies. Rather, exporters make a decision on whether or not to undertake FDI.

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File URL: http://fordschool.umich.edu/rsie/workingpapers/Papers551-575/r560.pdf
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Paper provided by Research Seminar in International Economics, University of Michigan in its series Working Papers with number 560.

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Length: 35 pages
Date of creation: 2007
Handle: RePEc:mie:wpaper:560
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