2023 Fiscal Year Research-status Report
The Impact of Global Value Chain Participation on Attracting Greenfield FDI: A Sectoral Analysis
| Project/Area Number |
22K01455
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| Research Institution | Yokohama National University |
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Principal Investigator |
C・R Parsons 横浜国立大学, 大学院国際社会科学研究院, 教授 (10334616)
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| Project Period (FY) |
2022-04-01 – 2025-03-31
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| Keywords | FDI / GVC / industry / backward linkages / forward linkages |
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| Outline of Annual Research Achievements |
After presenting our preliminary results several times at international and domestic conferences and seminars, we have refined our analysis based on the valuable feedback from the participants and discussants. Our final results suggest a very strong effect of greater GVC participation on drawing in more inward FDI across the world. However, these results are most strong for North America, EU and East Asia and the Pacific. Some differences are also seen across different sectors (industries). This is true for both Forward and Backward measures of GVCs. We are now in the processing of revising the paper. We hope to submit it to an internationally refereed journal next month.
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| Current Status of Research Progress |
Current Status of Research Progress
2: Research has progressed on the whole more than it was originally planned.
Reason
We have successfully answered the research question that we set out to answer. We confirmed a positive the effect (for most industries) of greater GVC participation on FDI inflows evaluated at the sectoral level for a global set of countries using the recent Borin & Mancini method of GVC measurement and the detailed FDI data from the Financial Times database. We will submit the first paper to a journal next month. Our findings will also spur future work in this area.
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| Strategy for Future Research Activity |
After we submit our current draft of the paper, we will continue to present it at workshops and seminars before the final revisions and acceptance (currently, we are considering submitting to J. of Econ. Studies).Future related research: In the course of studying this topic, we also re-affirmed that FDI flows are naturally effected by huge global shocks and other uncertainties such as the Global Financial Crisis in 2008 and also during Covid-19 pandemic. We will continue to explore the size and impact of uncertainty on FDI flows using the same global FDI database used here, but coupled with other measures of global (and perhaps local) uncertainty to better answer this new, but related question.
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| Causes of Carryover |
Our analysis still suffered from an endogeneity problem in mid-2023, which we became of aware of after several previous presentations at conferences and seminars. As such, we were not yet ready to present this work at the WEAI or Eastern Econ Association meetings as planned in FY2023. After receiving suggestions and comments and self-study on our own, we found a solution to our endogeneity problem in March 2024. So we are now ready to present our new results at conferences and submit to a journal this new Fiscal Year.
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