Exchange rate volatility and MNCs' production and distribution networks: The case of Japanese manufacturing MNCs

Kozo Kiyota; Toshiyuki Matsuura; Shujiro Urata

doi:10.1142/S0217590808003087

Exchange rate volatility and MNCs' production and distribution networks: The case of Japanese manufacturing MNCs

Kozo Kiyota, Toshiyuki Matsuura, Shujiro Urata

Research output: Contribution to journal › Article › peer-review

9 Citations (Scopus)

Abstract

This paper empirically examines the impacts of exchange rate volatility on the location choice by Japanese multinational corporations (MNCs) and their intra-firm trade. We use affiliate-level data for Japanese MNCs for 1995, 1998 and 2001. We found that high exchange rate volatility discourages the establishment of an affiliate by MNCs. Moreover, the high exchange rate volatility causes the shift from inter-firm to intra-firm transactions. These findings imply the importance of maintaining a stable exchange rate environment in order for MNCs to expand their production and distribution networks.

Original language	English
Pages (from-to)	523-538
Number of pages	16
Journal	Singapore Economic Review
Volume	53
Issue number	3
DOIs	https://doi.org/10.1142/S0217590808003087
Publication status	Published - 2008 Dec 1
Externally published	Yes

Keywords

Exchange rate volatility
Intra-firm trade
Location choice

ASJC Scopus subject areas

Economics and Econometrics

Access to Document

10.1142/S0217590808003087

Fingerprint Dive into the research topics of 'Exchange rate volatility and MNCs' production and distribution networks: The case of Japanese manufacturing MNCs'. Together they form a unique fingerprint.

Cite this

@article{392473c77f914ad7aa3fa84b23f600d7,

title = "Exchange rate volatility and MNCs' production and distribution networks: The case of Japanese manufacturing MNCs",

abstract = "This paper empirically examines the impacts of exchange rate volatility on the location choice by Japanese multinational corporations (MNCs) and their intra-firm trade. We use affiliate-level data for Japanese MNCs for 1995, 1998 and 2001. We found that high exchange rate volatility discourages the establishment of an affiliate by MNCs. Moreover, the high exchange rate volatility causes the shift from inter-firm to intra-firm transactions. These findings imply the importance of maintaining a stable exchange rate environment in order for MNCs to expand their production and distribution networks.",

keywords = "Exchange rate volatility, Intra-firm trade, Location choice",

author = "Kozo Kiyota and Toshiyuki Matsuura and Shujiro Urata",

year = "2008",

month = dec,

day = "1",

doi = "10.1142/S0217590808003087",

language = "English",

volume = "53",

pages = "523--538",

journal = "Singapore Economic Review",

issn = "0217-5908",

publisher = "World Scientific Publishing Co. Pte Ltd",

number = "3",

}

TY - JOUR

T1 - Exchange rate volatility and MNCs' production and distribution networks

T2 - The case of Japanese manufacturing MNCs

AU - Kiyota, Kozo

AU - Matsuura, Toshiyuki

AU - Urata, Shujiro

PY - 2008/12/1

Y1 - 2008/12/1

N2 - This paper empirically examines the impacts of exchange rate volatility on the location choice by Japanese multinational corporations (MNCs) and their intra-firm trade. We use affiliate-level data for Japanese MNCs for 1995, 1998 and 2001. We found that high exchange rate volatility discourages the establishment of an affiliate by MNCs. Moreover, the high exchange rate volatility causes the shift from inter-firm to intra-firm transactions. These findings imply the importance of maintaining a stable exchange rate environment in order for MNCs to expand their production and distribution networks.

AB - This paper empirically examines the impacts of exchange rate volatility on the location choice by Japanese multinational corporations (MNCs) and their intra-firm trade. We use affiliate-level data for Japanese MNCs for 1995, 1998 and 2001. We found that high exchange rate volatility discourages the establishment of an affiliate by MNCs. Moreover, the high exchange rate volatility causes the shift from inter-firm to intra-firm transactions. These findings imply the importance of maintaining a stable exchange rate environment in order for MNCs to expand their production and distribution networks.

KW - Exchange rate volatility

KW - Intra-firm trade

KW - Location choice

UR - http://www.scopus.com/inward/record.url?scp=58149469959&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=58149469959&partnerID=8YFLogxK

U2 - 10.1142/S0217590808003087

DO - 10.1142/S0217590808003087

M3 - Article

AN - SCOPUS:58149469959

VL - 53

SP - 523

EP - 538

JO - Singapore Economic Review

JF - Singapore Economic Review

SN - 0217-5908

IS - 3

ER -