Revisiting complementarity between Japanese FDI and the import of intermediate goods: Agglomeration effects and parent-firm heterogeneity

Tadashi Ito, Toshiyuki Matsuura, Chih Hai Yang

Research output: Contribution to journalArticlepeer-review

1 Citation (Scopus)

Abstract

This study revisits the nexus between foreign direct investment (FDI) and international trade in the dynamic perspective, focusing on intermediate goods imports of affiliates of Japanese firms operating in China. To examine the effect of the formation of the agglomeration and the recent FDI made by small firms, both of which have been overlooked in the literature, we construct a unique parent-affiliate matched panel data set of trade in intermediate goods, and estimate a discrete-time hazard model over the 2000–06 period. We found that affiliates owned by firms in agglomerated regions in Japan have a shorter duration of trade in intermediate goods compared with affiliates owned by smaller Japanese firms.

Original languageEnglish
Pages (from-to)90-106
Number of pages17
JournalAsian Economic Papers
Volume19
Issue number3
DOIs
Publication statusPublished - 2020 Oct 1

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics
  • Political Science and International Relations

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