Industrial groupings and foreign direct investment
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.
|Date of creation:||01 Mar 2003|
|Date of revision:||01 Mar 2003|
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NBER Working Papers
4767, National Bureau of Economic Research, Inc.
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NBER Working Papers
7776, National Bureau of Economic Research, Inc.
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"Networks versus Markets in International Trade,"
NBER Working Papers
5617, National Bureau of Economic Research, Inc.
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