). For FDI in the non-manufacturing sector located in USA or Europe, we find a positive impact on parent firm productivity …

productivity and Tobin's q using firm-level data of Japanese firms. Our findings support predictions by Helpman, Melitz, and Yeaple … (2004) and by Chen, Horstmann, and Markusen (2008). That is, we find that firms with higher productivity tend to choose more … less foreign outsourcing of production. The difference in productivity is relatively less important for the choice between …