In this paper, we investigate empirically how firms' choices of globalization mode differ according to their 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)....

In recent years, Japanese manufacturers in both competitive and less competitive sectors have penetrated emerging economies, and sales in 2008 by Japanese affiliates established via foreign domestic investment (FDI) exceeded Japan's revenues from exports. To consider this phenomenon and the...