Two-dimensional analysis of the impact of outward FDI on performance at home: Evidence from Japanese manufacturing firms

Kazunobu Hayakawa, Toshiyuki Matsuura, Kazuyuki Motohashi, Ayako Obashi

Research output: Contribution to journalArticlepeer-review

14 Citations (Scopus)

Abstract

This paper empirically investigates two dimensions of changes in firm behavior and performance before and after foreign direct investment (FDI). The first dimension is the difference between vertical and horizontal FDI. The second dimension is the effect of outward FDI on firms' production and non-production activities in the home country. In our careful empirical analysis we use the propensity score matching method to show that the impact of outward FDI differs by dimension, that is, by FDI type and firms' production and non-production activities. In particular, while horizontal FDI increases demand for non-production workers, vertical FDI increases demand for skilled production workers.

Original languageEnglish
Pages (from-to)25-33
Number of pages9
JournalJapan and The World Economy
Volume27
DOIs
Publication statusPublished - 2013 Aug

Keywords

  • FDI
  • Multinational enterprises
  • Propensity score matching

ASJC Scopus subject areas

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

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