Networked FDI and third-country intra-firm trade

Toshihiro Okubo, Yuta Watabe

Research output: Contribution to journalArticlepeer-review

Abstract

Foreign direct investment (FDI) is networked. This is beyond vertical and horizontal FDIs. Affiliates locate across multiple countries and trade among them. This paper investigates the FDI networks, using the Japanese foreign affiliate data. First, we investigate location patterns and industry patterns of foreign affiliates and find the network structure of FDI. Then, third-country intra-firm trade is explored. The third-country sales and sourcing within the firm boundary (third-country intra-firm trade) is active, but only large firms tend to construct production networks and engage third-country intra-firm trade. Firm size (size of parent and affiliates and the number of affiliates) is crucial in understanding third-country intra-firm trade.

Original languageEnglish
Pages (from-to)591-606
Number of pages16
JournalInternational Review of Economics and Finance
Volume83
DOIs
Publication statusPublished - 2023 Jan

Keywords

  • Intra-firm trade
  • Multinational firms
  • Networked FDI
  • Sales and sourcing
  • Third-country

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics

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