Heterogeneous Impact of Trade Liberalization on Vertical FDI: Evidence from Japanese firm-level data
Project/Area Number |
23730249
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Research Category |
Grant-in-Aid for Young Scientists (B)
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Allocation Type | Multi-year Fund |
Research Field |
Applied economics
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Research Institution | Keio University |
Principal Investigator |
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Project Period (FY) |
2011 – 2014
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Project Status |
Completed (Fiscal Year 2014)
|
Budget Amount *help |
¥4,290,000 (Direct Cost: ¥3,300,000、Indirect Cost: ¥990,000)
Fiscal Year 2014: ¥650,000 (Direct Cost: ¥500,000、Indirect Cost: ¥150,000)
Fiscal Year 2013: ¥910,000 (Direct Cost: ¥700,000、Indirect Cost: ¥210,000)
Fiscal Year 2012: ¥1,430,000 (Direct Cost: ¥1,100,000、Indirect Cost: ¥330,000)
Fiscal Year 2011: ¥1,300,000 (Direct Cost: ¥1,000,000、Indirect Cost: ¥300,000)
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Keywords | 貿易自由化 / 経済政策 / 海外直接投資 / 生産性 |
Outline of Final Research Achievements |
This paper empirically explores the reason why a recent surge of foreign direct investment (FDI) to developing countries has been mainly driven by less productive firms. To this end, we present a simple model of FDI with vertical division of labor in a heterogeneous firm framework. From a theoretical point of view, in countries with low unskilled worker wages and low trade costs, firms with high productivity invest abroad and engage in international division of labor. Moreover, if trade costs have further reduced, the productivity cut-off level becomes lower and firms within the middle range of productivity will start investing in low wage countries. Our empirical analysis using logit estimation or a multinomial logit model of Japanese firms' FDI choices reveals that a reduction in tariff rates attracts even less productive vertical foreign direct investment (VFDI) firms. This result is consistent with a different definition of VFDI.
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Report
(4 results)
Research Products
(16 results)