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Industrial groupings and foreign direct investment

Author

Listed:
  • Bruce A. Blonigen

    () (Department of Economics, University of Oregon and NBER)

  • Christopher J. Ellis

    () (Department of Economics, University of Oregon)

  • Dietrich Fausten

    () (Department of Economics, Monash University)

Abstract

We explore worldwide foreign direct investment location decisions by Japanese manufacturing firms from 1985 through 1991. Our conditional logit estimates provide evidence that firms’ location decisions are affected by membership in either vertical or horizontal keiretsu. Consistent with previous studies that stress agglomeration effects on firms’ location decisions, we find that the stock of investment in a region by a firm’s vertical keiretsu partners increases the probability of location. Further, we find that the recent flow of investment into a region by a firm’s horizontal keiretsu partners increases the probability of investment to the region, providing evidence of networking effects.

Suggested Citation

  • Bruce A. Blonigen & Christopher J. Ellis & Dietrich Fausten, 2003. "Industrial groupings and foreign direct investment," University of Oregon Economics Department Working Papers 2003-19, University of Oregon Economics Department, revised 01 Mar 2003.
  • Handle: RePEc:ore:uoecwp:2003-19
    as

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    References listed on IDEAS

    as
    1. Miwa, Yoshiro & Ramseyer, J. Mark, 2006. "The Fable of the Keiretsu," University of Chicago Press Economics Books, University of Chicago Press, edition 0, number 9780226532707.
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    More about this item

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • G3 - Financial Economics - - Corporate Finance and Governance

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