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The role of Japanese FDI in China

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  • Latorre, María C.
  • Hosoe, Nobuhiro

Abstract

We quantify the impacts of a sharp fall of Japanese foreign direct investment (FDI) to China that occurred after the worldwide financial crisis in 2009 using a three-region (Japan, China, and the rest of the world) recursive dynamic computable general equilibrium model with multinational enterprises (MNEs). The FDI fall would reduce exports and production of Japanese MNE affiliates in China and depreciate the Renminbi. This latter effect would favor Chinese manufacturing, but China, would not be a gainer, because it would experience a contraction in its service sector, which would exceed the gains in manufacturing.

Suggested Citation

  • Latorre, María C. & Hosoe, Nobuhiro, 2016. "The role of Japanese FDI in China," Journal of Policy Modeling, Elsevier, vol. 38(2), pages 226-241.
    • Handle: RePEc:eee:jpolmo:v:38:y:2016:i:2:p:226-241
    DOI: 10.1016/j.jpolmod.2016.02.003
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    Cited by:

    1. María C. Latorre & Zoryana Olekseyuk & Hidemichi Yonezawa, 2020. "Foreign multinationals in service sectors: A general equilibrium analysis of Brexit," The World Economy, Wiley Blackwell, vol. 43(11), pages 2830-2859, November.
    2. Latorre, María C. & Olekseyuk, Zoryana & Yonezawa, Hidemichi, 2017. "Trade and FDI-related impacts of Brexit," Conference papers 332876, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    3. Latorre, María C. & Yonezawa, Hidemichi, 2018. "Stopped TTIP? Its potential impact on the world and the role of neglected FDI," Economic Modelling, Elsevier, vol. 71(C), pages 99-120.
    4. Gentile, Elisabetta & Li, Gen & Mariasingham, Mahinthan Joseph, 2020. "Assessing the impact of the US-PRC trade dispute using a multiregional CGE model," Conference papers 333144, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    5. Latorre, Maria C., 2014. "CGE analysis of the impact of foreign direct investment and tariff reform on female and male wages," Policy Research Working Paper Series 7073, The World Bank.
    6. Jianjun Zhou & Tingting Cao, 2024. "International friendship cities, spatial spillover effect and urban export growth: Evidence from China," Australian Economic Papers, Wiley Blackwell, vol. 63(2), pages 302-328, June.
    7. Ortiz Valverde, Gabriela & Latorre, María C., 2019. "Economic Analysis of Multinationals Firms in the UK after Brexit," Conference papers 333099, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    8. Sharif M. Hossain & Nobuhiro Hosoe, 2017. "Foreign Direct Investment in the Ready-Made Garments Sector of Bangladesh : Macro and Distributional Implications," GRIPS Discussion Papers 17-10, National Graduate Institute for Policy Studies.
    9. Ortiz Valverde, Gabriela & Latorre, MaríaC. & Cubells, José Francisco, 2024. "The EU–UK Trade and Cooperation Agreement: A short and long-term comprehensive analysis including FDI," Economic Modelling, Elsevier, vol. 139(C).
    10. Gabriela Ortiz Valverde & Maria C. Latorre, 2020. "A computable general equilibrium analysis of Brexit: Barriers to trade and immigration restrictions," The World Economy, Wiley Blackwell, vol. 43(3), pages 705-728, March.
    11. Gómez-Plana Antonio G. & Latorre María C., 2019. "Digitalization, Multinationals and Employment: An Empirical Analysis of Their Causal Relationships," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 239(3), pages 399-439, June.
    12. Zhou, Jing & Latorre, María C., 2021. "FDI in China and global production networks: Assessing the role of and impact on big world players," Journal of Policy Modeling, Elsevier, vol. 43(6), pages 1225-1240.
    13. Latorre, María C. & Olekseyuk, Zoryana & Yonezawa, Hidemichi & Robinson, Sherman, 2020. "Making sense of Brexit losses: An in-depth review of macroeconomic studies," Economic Modelling, Elsevier, vol. 89(C), pages 72-87.
    14. Latorre, María C. & Yonezawa, Hidemichi & Zhou, Jing, 2018. "A general equilibrium analysis of FDI growth in Chinese services sectors," China Economic Review, Elsevier, vol. 47(C), pages 172-188.

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    More about this item

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation

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