Complex vertical FDI and firm heterogeneity: Evidence from East Asia
This study statistically tests the validity of the mechanics of complex vertical foreign direct investment (C-VFDI) in Japanese machinery FDI to East Asia by estimating a multiple-spatial lag model. From a theoretical perspective regarding C-VFDI, the production activity of affiliates in a given country is positively related to the production activity in neighboring countries that have large differences in factor prices with the given country. Furthermore, high-productivity firms are likely to choose a C-VFDI strategy. Our empirical results show no robust geographical relationship among affiliates' activities. However, the significantly positive relationship in wage differentials among those activities is found only for high-productivity firms.
Year of publication: |
2011
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Authors: | Hayakawa, Kazunobu ; Matsuura, Toshiyuki |
Published in: |
Journal of the Japanese and International Economies. - Elsevier, ISSN 0889-1583. - Vol. 25.2011, 3, p. 273-289
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Publisher: |
Elsevier |
Keywords: | Third-country effects Complex VFDI Spatial lag model |
Saved in:
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