IDEAS home Printed from https://ideas.repec.org/p/boj/bojwps/05-e-15.html
   My bibliography  Save this paper

Trade Patterns in Japan's Machinery Sector

Author

Listed:
  • Hitoshi Sasaki

    (Bank of Japan)

  • Yuko Koga

    (Bank of Japan)

Abstract

This paper analyzes trade patterns in Japan's machinery sector using disaggregated data of export and import commodities. It is found that the vertical intra-industry trade--the two-way trade of products differentiated by quality--with Asian countries expanded in the 1990s. According to the results of the empirical study, this trade pattern is closely related to differences in the capital/labor ratio between Japan and its trading partners, and to Japan's foreign direct investments. It suggests that the development of Japan's trade in the machinery sector in the 1990s is explained by traditional trade theory, i.e., that trade patterns depend on the difference in factor endowment between trading partners. Japan's foreign direct investment, too, has played an important role.

Suggested Citation

  • Hitoshi Sasaki & Yuko Koga, 2005. "Trade Patterns in Japan's Machinery Sector," Bank of Japan Working Paper Series 05-E-15, Bank of Japan.
    • Handle: RePEc:boj:bojwps:05-e-15
    as

    Download full text from publisher

    File URL: http://www.boj.or.jp/en/research/wps_rev/wps_2005/data/wp05e15.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Falvey, Rodney E., 1981. "Commercial policy and intra-industry trade," Journal of International Economics, Elsevier, vol. 11(4), pages 495-511, November.
    2. James R. Markusen, 2004. "Multinational Firms and the Theory of International Trade," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262633078, April.
    3. Fukao, Kyoji & Ishido, Hikari & Ito, Keiko, 2003. "Vertical intra-industry trade and foreign direct investment in East Asia," Journal of the Japanese and International Economies, Elsevier, vol. 17(4), pages 468-506, December.
    4. Lionel Fontagné & Michaël Freudenberg & Nicolas Peridy, 1997. "Trade Patterns Inside the Single Market," Working Papers 1997-07, CEPII research center.
    5. Rudiger Dornbusch & Stanley Fischer & Paul A. Samuelson, 1980. "Heckscher-Ohlin Trade Theory with a Continuum of Goods," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 95(2), pages 203-224.
    6. Hitoshi Sasaki, 2004. "Why Are Exports to East Asia Growing So Rapidly? -A Structural VAR Approach in Search of Non-China Factors-," Bank of Japan Review Series 04-E-1, Bank of Japan.
    7. Jörn Kleinert, 2003. "Growing Trade in Intermediate Goods: Outsourcing, Global Sourcing, or Increasing Importance of MNE Networks?," Review of International Economics, Wiley Blackwell, vol. 11(3), pages 464-482, August.
    8. David Hummels & James Levinsohn, 1995. "Monopolistic Competition and International Trade: Reconsidering the Evidence," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 110(3), pages 799-836.
    9. Helpman, Elhanan, 1987. "Imperfect competition and international trade : Opening remarks," European Economic Review, Elsevier, vol. 31(1-2), pages 77-81.
    10. Kyoji Fukao & Toshihiro Okubo, 2004. "Why Has the Border Effect in the Japanese Market Declined? The Role of Business Networks in East Asia," Discussion papers 04016, Research Institute of Economy, Trade and Industry (RIETI).
    11. John T. Durkin Jr & Markus Krygier, 2000. "Differences in GDP Per Capita and the Share of Intraindustry Trade: The Role of Vertically Differentiated Trade," Review of International Economics, Wiley Blackwell, vol. 8(4), pages 760-774, November.
    12. repec:bla:reviec:v:8:y:2000:i:4:p:760-74 is not listed on IDEAS
    13. Greenaway, David & Hine, Robert C & Milner, Chris, 1995. "Vertical and Horizontal Intra-industry Trade: A Cross Industry Analysis for the United Kingdom," Economic Journal, Royal Economic Society, vol. 105(433), pages 1505-1518, November.
    14. Keith Head & John Ries, 2004. "Exporting and FDI as Alternative Strategies," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 20(3), pages 409-423, Autumn.
    15. Helpman, Elhanan, 1987. "Imperfect competition and international trade: Evidence from fourteen industrial countries," Journal of the Japanese and International Economies, Elsevier, vol. 1(1), pages 62-81, March.
    16. Lipsey, Robert E. & Ramstetter, Eric D., 2003. "Japanese exports, MNC affiliates, and rivalry for export markets," Journal of the Japanese and International Economies, Elsevier, vol. 17(2), pages 101-117, June.
    17. Kyoji Fukao; Toshihiro Okubo, 2004. "Why Has the Border Effect in the Japanese Market Declined?," IHEID Working Papers 12-2004, Economics Section, The Graduate Institute of International Studies.
    18. Koike, Ryoji, 2004. "Japan's Foreign Direct Investment and Structural Changes in Japanese and East Asian Trade," Monetary and Economic Studies, Institute for Monetary and Economic Studies, Bank of Japan, vol. 22(3), pages 145-182, October.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Imre Ferto & Károly Attila Soós, 2012. "Controversial issues in factors determining intra-industry trade," International Journal of Economics and Business Research, Inderscience Enterprises Ltd, vol. 4(1/2), pages 132-148.
    2. Greenaway, David & Torstensson, Johan, 2000. "Economic Geography, Comparative Advantage and Trade within Industries: Evidence from the OECD," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 15, pages 260-280.
    3. J. Hanna & L. L鶩 & S. Petit, 2015. "Intra-tourism trade, income distribution and tourism endowment: an econometric investigation," Applied Economics, Taylor & Francis Journals, vol. 47(21), pages 2184-2200, May.
    4. Ando, Mitsuyo, 2006. "Fragmentation and vertical intra-industry trade in East Asia," The North American Journal of Economics and Finance, Elsevier, vol. 17(3), pages 257-281, December.
    5. Toshihiro Okubo, 2004. "Intra-industry Trade and Production Networks," IHEID Working Papers 13-2004, Economics Section, The Graduate Institute of International Studies.
    6. Jose Caetano & Aurora Galego, 2007. "In Search for the Determinants of Intra-Industry Trade within an Enlarged Europe," South-Eastern Europe Journal of Economics, Association of Economic Universities of South and Eastern Europe and the Black Sea Region, vol. 5(2), pages 163-183.
    7. Yushi Yoshida & Nuno Carlos Leitão & Horácio Faustino, 2008. "Intra-Industry Trade between Japan and European Countries: a Closer Look at the Quality Gap in VIIT," Working Papers Department of Economics 2008/53, ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa.
    8. Manuel Cabral & Rod Falvey & Chris Milner, 2013. "Endowment Differences and the Composition of Intra-Industry Trade," Review of International Economics, Wiley Blackwell, vol. 21(3), pages 401-418, August.
    9. Vogiatzoglou, Klimis, 2005. "Varieties or Qualities? Horizontal and Vertical Intra-industry Trade within the NAFTA Trade Bloc," Estey Centre Journal of International Law and Trade Policy, Estey Centre for Law and Economics in International Trade, vol. 6(2), pages 1-13.
    10. Keiko Ito & Kyoji Fukao, 2005. "Physical and Human Capital Deepening and New Trade Patterns in Japan," NBER Chapters, in: International Trade in East Asia, pages 7-52, National Bureau of Economic Research, Inc.
    11. Lionel Fontagné & Michael Frudenberg & Nicolas Péridy, 1998. "Commerce international et structures de marché : une vérification empirique," Économie et Prévision, Programme National Persée, vol. 135(4), pages 147-167.
    12. Imre Fertő & Szilárd Podruzsik & Jeremiás Balogh, 2016. "Intra-industry trade in the wine sector in the enlarged European Union," Review of Agricultural, Food and Environmental Studies, Springer, vol. 97(3), pages 159-172, November.
    13. Muhammad Shahbaz & Nuno Carlos Leit o & Muhammad Sabihuddin Butt, 2012. "Pakistan Intra-Industry Trade: A Panel Data Approach," International Journal of Economics and Financial Issues, Econjournals, vol. 2(2), pages 225-232.
    14. A K M Azhar & R J R Elliott, 2003. "Economic Integration and the Evolution of Trade: A Geometric Interpretation," Economics Discussion Paper Series 0308, Economics, The University of Manchester.
    15. Fukao, Kyoji & Ishido, Hikari & Ito, Keiko, 2003. "Vertical intra-industry trade and foreign direct investment in East Asia," Journal of the Japanese and International Economies, Elsevier, vol. 17(4), pages 468-506, December.
    16. Naoto Jinji & Xingyuan Zhang & Shoji Haruna, 2022. "Deep Integration, Global Firms, and Technology Spillovers," Advances in Japanese Business and Economics, Springer, number 978-981-16-5210-3, June.
    17. FUKAO Kyoji & HAMAGATA Sumio & INUI Tomohiko & ITO Keiko & Hyeog Ug KWON & MAKINO Tatsuji & MIYAGAWA Tsutomu & NAKANISHI Yasuo & TOKUI Joji, 2007. "Estimation Procedures and TFP Analysis of the JIP Database 2006 Provisional Version," Discussion papers 07003, Research Institute of Economy, Trade and Industry (RIETI).
    18. Ferto, Imre & Jambor, Attila, 2013. "Vertical Intra-Industry Trade and the EU Accession: The Case of Hungarian Agri-Food Sector," 87th Annual Conference, April 8-10, 2013, Warwick University, Coventry, UK 158847, Agricultural Economics Society.
    19. Fertő, Imre, 2006. "Vertikálisan és horizontálisan differenciált, ágazaton belüli kereskedelem az Európai Unió tejpiacán [Trade within vertically and horizontally differentiated industries on the milk market of the Eu," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(6), pages 526-539.
    20. Patryk Emanuel TOPOROWSKI, 2017. "Did the economic crisis change V4 trade patterns? The case of intra-industry trade," Eastern Journal of European Studies, Centre for European Studies, Alexandru Ioan Cuza University, vol. 8, pages 71-93, December.

    More about this item

    Keywords

    Vertical intra-industry trade; Foreign direct investment; Asia;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F20 - International Economics - - International Factor Movements and International Business - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:boj:bojwps:05-e-15. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Bank of Japan (email available below). General contact details of provider: https://edirc.repec.org/data/bojgvjp.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.