When free trade agreement meets competition----How does EU-Korea FTA affect Japanese firms' investment behavior

2021 Fiscal Year Final Research Report

• Project/Area Number: 18K12777
• Research Category: Grant-in-Aid for Early-Career Scientists
• Allocation Type: Multi-year Fund
• Review Section: Basic Section 07040:Economic policy-related
• Research Institution: Hosei University
• Principal Investigator: Ni Bin 法政大学, 経済学部, 准教授 (60779677)
• Project Period (FY): 2018-04-01 – 2022-03-31
• Keywords: free trade agreement / firm behavior / positive impact / competitive industry

Outline of Final 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.

Free Research Field

国際経済

Academic Significance and Societal Importance of the Research Achievements

This study takes a novel approach by verifying FTA's impact on investors from outside the region. When examining how FTA affects FDI patterns of Japanese affiliates, it makes use of the industrial competition from Korean counterparts, to mitigate the potential estimation bias.