2021 Fiscal Year Annual Research Report
When free trade agreement meets competition----How does EU-Korea FTA affect Japanese firms' investment behavior
| Project/Area Number |
18K12777
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| Research Institution | Hosei University |
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Principal Investigator |
倪 彬 法政大学, 経済学部, 准教授 (60779677)
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| Project Period (FY) |
2018-04-01 – 2022-03-31
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| Keywords | Free trade agreement / firm behavior / positive impact / competitive industry |
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| Outline of Annual Research Achievements |
This research analyzes the effects of the formation of bilateral free trade agreement (FTA hereafter) on the investment of multinational firms whose origin is from outside the FTA regions. In particular, this study empirically verifies how bilateral free trade agreement signed by EU and Korea in 2011 affects Japanese firms' investment in EU, by looking at the decision-making of Japanese affiliates that have already operated inside EU.
The main contribution of this study lies in the fact that while previous studies have investigated how regional trade agreement promotes foreign firms' economic activities in that region, none of them have attempted to verify FTA's impact on investors from outside the region. Another uniqueness of this study is that, when examining how bilateral free trade agreement affects FDI patterns of Japanese affiliates, it makes use of the industrial competition from Korean counterparts, to mitigate the potential estimation bias of the FTA itself.
In this calender year, I have summarized the findings into a paper written in Japanese, which is expected to be published in the book edited by the Institute of Comparative Economic Studies, Hosei University. I also attended the second round of the workshop organized by the Institute. Based on the comments from the audience, I have improved the previous draft, which is forthcoming in the working paper series of the Economics Department, Hosei University. It is scheduled to be submitted to a refereed journal in the near future.
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