Global Production Sharing and the FDI Trade Nexus: New Evidence from the Japanese Automobile Industry
The growing importance of global production sharing makes the nexus between outward foreign direct investment (FDI) and trade in parts and components ever more important. This paper examines the impact of overseas operation of upstream firms (parts and components suppliers) on parts and components exports from the home country through a case study of the Japanese automobile industry. The empirical analysis is based on a newly-constructed product-level dataset covering 32 products and 49 host countries over the period 1993 to 2008. It is found that overseas operation of upstream firm lead to additional exports of intermediate goods from the home country. This finding runs counter to the the popular view that the growing overseas activity of multinational enterprises could replace intermediate exports from a home country, thereby depriving the home country of job opportunities.
|Date of creation:||2012|
|Date of revision:|
|Contact details of provider:|| Postal: Crawford Building, Lennox Crossing, Building #132, Canberra ACT 2601|
Phone: +61 2 6125 4705
Fax: +61 2 6125 5448
Web page: https://crawford.anu.edu.au/acde/publications/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Prema-chandra Athukorala & Nobuaki Yamashita, 2005.
"Production Fragmentation and Trade Integration: East Asia in a Global Context,"
Departmental Working Papers
2005-07, The Australian National University, Arndt-Corden Department of Economics.
- Athukorala, Prema-chandra & Yamashita, Nobuaki, 2006. "Production fragmentation and trade integration: East Asia in a global context," The North American Journal of Economics and Finance, Elsevier, vol. 17(3), pages 233-256, December.
- Blomstrom, Magnus & Lipsey, Robert E., 1986.
"Firm Size and Foreign Direct Investment,"
86-34, C.V. Starr Center for Applied Economics, New York University.
- Hackett, Steven C. & Srinivasan, Krishna, 1998. "Do supplier switching costs differ across Japanese and US multinational firms?," Japan and the World Economy, Elsevier, vol. 10(1), pages 13-32, January.
- Blonigen, Bruce A., 2001.
"In search of substitution between foreign production and exports,"
Journal of International Economics,
Elsevier, vol. 53(1), pages 81-104, February.
- Bruce A. Blonigen, 1999. "In Search of Substitution Between Foreign Production and Exports," NBER Working Papers 7154, National Bureau of Economic Research, Inc.
- Head, C. Keith & Ries, John C. & Swenson, Deborah L., 1999. "Attracting foreign manufacturing: Investment promotion and agglomeration," Regional Science and Urban Economics, Elsevier, vol. 29(2), pages 197-218, March.
- Santos Silva, J.M.C & Tenreyro, Silvana, 2005.
"The Log of Gravity,"
CEPR Discussion Papers
5311, C.E.P.R. Discussion Papers.
- Joao Santos Silva & Silvana Tenreyro, 2005. "The log of gravity," LSE Research Online Documents on Economics 3744, London School of Economics and Political Science, LSE Library.
- Joao Santos Silva & Silvana Tenreyro, 2005. "The Log of Gravity," CEP Discussion Papers dp0701, Centre for Economic Performance, LSE.
- Timothy Sturgeon & Johannes Van Biesebroeck & Gary Gereffi, 2008. "Value chains, networks and clusters: reframing the global automotive industry," Journal of Economic Geography, Oxford University Press, vol. 8(3), pages 297-321, May.
- Nobuaki Yamashita & Kyoji Fukao, 2008.
"Expansion Abroad and Jobs at Home: Evidence from Japanese Multinational Enterprises,"
Asia Pacific Economic Papers
377, Australia-Japan Research Centre, Crawford School of Public Policy, The Australian National University.
- Yamashita, Nobuaki & Fukao, Kyoji, 2010. "Expansion abroad and jobs at home: Evidence from Japanese multinational enterprises," Japan and the World Economy, Elsevier, vol. 22(2), pages 88-97, March.
- Nobuaki Yamashita & Kyoji Fukao, 2009. "Expansion Abroad and Jobs at Home - Evidence from Japanese Multinational Enterprises," Macroeconomics Working Papers 22707, East Asian Bureau of Economic Research.
- Head, Keith & Ries, John & Swenson, Deborah, 1995.
"Agglomeration benefits and location choice: Evidence from Japanese manufacturing investments in the United States,"
Journal of International Economics,
Elsevier, vol. 38(3-4), pages 223-247, May.
- Keith Head & John Ries & Deborah Swenson, 1994. "Agglomeration Benefits and Location Choice: Evidence from Japanese Manufacturing Investment in the United States," NBER Working Papers 4767, National Bureau of Economic Research, Inc.
- Magnus Blomstrom & Robert E. Lipsey & Ksenia Kulchycky, 1988.
"U.S. and Swedish Direct Investment and Exports,"
in: Trade Policy Issues and Empirical Analysis, pages 257-302
National Bureau of Economic Research, Inc.
- Keith Head & John Ries & Barbara J. Spencer, 2004.
"Vertical Networks and US Auto Parts Exports: Is Japan Different?,"
Journal of Economics & Management Strategy,
Wiley Blackwell, vol. 13(1), pages 37-67, 03.
- Keith Head & John Ries & Barbara J. Spencer, 2002. "Vertical Networks and US Auto Parts Exports: Is Japan Different?," NBER Working Papers 9162, National Bureau of Economic Research, Inc.
- Yeats, Alexander J., 1998. "Just how big is global production sharing?," Policy Research Working Paper Series 1871, The World Bank.
- James R. Markusen, 1995. "The Boundaries of Multinational Enterprises and the Theory of International Trade," Journal of Economic Perspectives, American Economic Association, vol. 9(2), pages 169-189, Spring.
- Brainard, S Lael, 1997. "An Empirical Assessment of the Proximity-Concentration Trade-off between Multinational Sales and Trade," American Economic Review, American Economic Association, vol. 87(4), pages 520-44, September.
- Kimura, Fukunari & Ando, Mitsuyo, 2005. "Two-dimensional fragmentation in East Asia: Conceptual framework and empirics," International Review of Economics & Finance, Elsevier, vol. 14(3), pages 317-348.
- Lipsey, Robert E. & Ramstetter, Eric D., 2003. "Japanese exports, MNC affiliates, and rivalry for export markets," Journal of the Japanese and International Economies, Elsevier, vol. 17(2), pages 101-117, June.
- Gene M. Grossman & Elhanan Helpman, 2002. "Integration versus Outsourcing in Industry Equilibrium," The Quarterly Journal of Economics, Oxford University Press, vol. 117(1), pages 85-120.
- Yeaple, Stephen & Helpman, Elhanan & Melitz, Marc, 2004.
"Export versus FDI with Heterogeneous Firms,"
3229098, Harvard University Department of Economics.
- Deborah L. Swenson, 1997. "Explaining Domestic Content: Evidence from Japanese and U.S. Automobile Production in the United States," NBER Chapters, in: The Effects of U.S. Trade Protection and Promotion Policies, pages 33-54 National Bureau of Economic Research, Inc.
- Blonigen, Bruce A. & Ellis, Christopher J. & Fausten, Dietrich, 2005.
"Industrial groupings and foreign direct investment,"
Journal of International Economics,
Elsevier, vol. 65(1), pages 75-91, January.
- 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.
- Seungjin Kim, 2000. "Effects of Outward Foreign Direct Investment on Home Country Performance: Evidence from Korea," NBER Chapters, in: The Role of Foreign Direct Investment in East Asian Economic Development, NBER-EASE Volume 9, pages 295-317 National Bureau of Economic Research, Inc.
- Keith Head & John Ries, 2004. "Exporting and FDI as Alternative Strategies," Oxford Review of Economic Policy, Oxford University Press, vol. 20(3), pages 409-423, Autumn.
- Yamawaki, Hideki, 1991. "Exports and Foreign Distributional Activities: Evidence on Japanese Firms in the United States," The Review of Economics and Statistics, MIT Press, vol. 73(2), pages 294-300, May.
- Grubert, Harry & Mutti, John, 1991. "Taxes, Tariffs and Transfer Pricing in Multinational Corporate Decision Making," The Review of Economics and Statistics, MIT Press, vol. 73(2), pages 285-93, May.
- Head, Keith & Ries, John, 2001. "Overseas Investment and Firm Exports," Review of International Economics, Wiley Blackwell, vol. 9(1), pages 108-22, February.
- Lipsey, Robert E & Weiss, Merle Yahr, 1981. "Foreign Production and Exports in Manufacturing Industries," The Review of Economics and Statistics, MIT Press, vol. 63(4), pages 488-94, November.
- Lipsey, Robert E & Weiss, Merle Yahr, 1984. "Foreign Production and Exports of Individual Firms," The Review of Economics and Statistics, MIT Press, vol. 66(2), pages 304-08, May.
- Wong, Kar-yiu, 1986. "Are international trade and factor mobility substitutes?," Journal of International Economics, Elsevier, vol. 21(1-2), pages 25-43, August.
- Robert E. Lipsey & Eric D. Ramstetter & Magnus Blomstrom, 2000. "Outward FDI and Parent Exports and Employment: Japan, the United States, and Sweden," NBER Working Papers 7623, National Bureau of Economic Research, Inc.
- Clausing, Kimberly A, 2000. "Does Multinational Activity Displace Trade?," Economic Inquiry, Western Economic Association International, vol. 38(2), pages 190-205, April.
- Kunal Banerji & Rakesh B Sambharya, 1996. "Vertical Keiretsu and International Market Entry: The Case of the Japanese Automobile Ancillary Industry," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 27(1), pages 89-113, March.
- Wooldridge, Jeffrey M., 1999.
"Distribution-free estimation of some nonlinear panel data models,"
Journal of Econometrics,
Elsevier, vol. 90(1), pages 77-97, May.
- Wooldridge, J.M., 1990. "Distribution-Free Estimation Of Some Nonlinear Panel Data Models," Working papers 564, Massachusetts Institute of Technology (MIT), Department of Economics.
- Markusen, James R., 1984. "Multinationals, multi-plant economies, and the gains from trade," Journal of International Economics, Elsevier, vol. 16(3-4), pages 205-226, May.
When requesting a correction, please mention this item's handle: RePEc:pas:papers:2012-13. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sandra Zec)
If references are entirely missing, you can add them using this form.