TY - JOUR
T1 - Agglomeration effects of inter-firm backward and forward linkages
T2 - Evidence from Japanese manufacturing investment in China
AU - Yamashita, Nobuaki
AU - Matsuura, Toshiyuki
AU - Nakajima, Kentaro
N1 - Funding Information:
We acknowledge the financial assistance from the Kikawada foundation in Tokyo, Japan as well as from the JSPS (#25380275). We are also grateful to Takatoshi Tabuchi and Kyoji Fukao for their supports for the grant application. We would also like to thank a referee of JJIE for the prompt, constructive and very useful comments. The quality of the paper has significantly been enriched by incorporating the referee’s suggestions. We are also grateful to Rene Belderbos, Noel Gaston, Kozo Kiyota, and the workshop attendees at University of Tokyo, Keio University, Tohoku University, Prefecture University of Kumamoto, Fukuoka University and the Japan Society of International Economics for their useful comments.
PY - 2014/12
Y1 - 2014/12
N2 - This paper examines the agglomeration effects of multinational firms on the location decisions of first-time Japanese manufacturing investors in China for the period 1995-2007. This is accomplished by exploiting newly constructed measures of inter-firm backward and forward linkages formed in a home country. The conditional and mixed logit estimates reveal that agglomeration by first-tier suppliers and customers draws subsequent investment into a location. However, such agglomeration effects are not pervasive and do not extend to the second and third tiers. Instead, we find that agglomeration by third-tier suppliers generates a countervailing force, making a location relatively unattractive.
AB - This paper examines the agglomeration effects of multinational firms on the location decisions of first-time Japanese manufacturing investors in China for the period 1995-2007. This is accomplished by exploiting newly constructed measures of inter-firm backward and forward linkages formed in a home country. The conditional and mixed logit estimates reveal that agglomeration by first-tier suppliers and customers draws subsequent investment into a location. However, such agglomeration effects are not pervasive and do not extend to the second and third tiers. Instead, we find that agglomeration by third-tier suppliers generates a countervailing force, making a location relatively unattractive.
KW - Agglomeration
KW - Backward and forward linkages
KW - Location choice of multinational enterprises
UR - http://www.scopus.com/inward/record.url?scp=84899807461&partnerID=8YFLogxK
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U2 - 10.1016/j.jjie.2014.04.001
DO - 10.1016/j.jjie.2014.04.001
M3 - Article
AN - SCOPUS:84899807461
SN - 0889-1583
VL - 34
SP - 24
EP - 41
JO - Journal of the Japanese and International Economies
JF - Journal of the Japanese and International Economies
ER -
