Networked FDI: Sales and Sourcing Patterns of Japanese Foreign Affiliates

28 Pages Posted: 25 May 2012

See all articles by Richard Baldwin

Richard Baldwin

Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER)

Toshihiro Okubo

University of Geneva - Graduate Institute of International Studies (HEI)

Multiple version iconThere are 2 versions of this paper

Date Written: May 2012

Abstract

Using firm-level data on the sales and sourcing patterns of Japanese affiliates, this paper suggests that very little FDI falls neatly into the standard bins of horizontal, vertical and export-platform FDI. Most affiliates import some intermediates and export some output suggesting a pattern that might be called ‘networked FDI’. This suggests that that the nature of FDI is influenced by ‘regional comparative advantage’ i.e. the proximity of markets and suppliers. The paper also suggests an empirical strategy for testing and classifying the nature of FDI based on firms’ sales and sourcing patterns rather than standard macro-level variables such as market size and income differences.

Keywords: complex FDI, Japanese foreign affiliates, networked FDI, sales, sourcing, vertical and horizontal FDI

JEL Classification: F21, F23

Suggested Citation

Baldwin, Richard and Okubo, Toshihiro, Networked FDI: Sales and Sourcing Patterns of Japanese Foreign Affiliates (May 2012). CEPR Discussion Paper No. DP8963, Available at SSRN: https://ssrn.com/abstract=2066336

Richard Baldwin

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Toshihiro Okubo

University of Geneva - Graduate Institute of International Studies (HEI) ( email )

PO Box 136
Geneva, CH-1211
Switzerland
+41 22 908 5900 (Phone)

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
1
Abstract Views
309
PlumX Metrics