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How Does FDI in East Asia Affect Performance at Home?: Evidence from Electrical Machinery Manufacturing Firms

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  • MATSUURA Toshiyuki
  • MOTOHASHI Kazuyuki
  • HAYAKAWA Kazunobu

Abstract

This paper pinpoints the impact of Japanese electronic machinery FDIs on productivity at home. Our analysis is based on the activity level of firms and not on their ready-made level. For example, if a firm has more than two kinds of activities such as upstream activity and downstream activity, we treat these activities as different. Our empirical results are consistent with their theoretical predictions: the horizontal FDI of an activity does not necessarily have the same significant positive impact on the productivity of domestic activities as the invested activity. On the other hand, the vertical FDI of an activity significantly enhances both the level and growth of productivity in domestic activities that have an input-output relationship with the invested activity.

Suggested Citation

  • MATSUURA Toshiyuki & MOTOHASHI Kazuyuki & HAYAKAWA Kazunobu, 2008. "How Does FDI in East Asia Affect Performance at Home?: Evidence from Electrical Machinery Manufacturing Firms," Discussion papers 08034, Research Institute of Economy, Trade and Industry (RIETI).
    • Handle: RePEc:eti:dpaper:08034
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    Cited by:

    1. Hayakawa, Kazunobu & Matsuura, Toshiyuki & Motohashi, Kazuyuki & Obashi, Ayako, 2013. "Two-dimensional analysis of the impact of outward FDI on performance at home: Evidence from Japanese manufacturing firms," Japan and the World Economy, Elsevier, vol. 27(C), pages 25-33.
    2. Codruța Dura & Oana Dobre-Baron, 2011. "Analysis of Foreign Direct Investments Engaged by Japanese Multinational Companies," Annals of the University of Petrosani, Economics, University of Petrosani, Romania, vol. 11(2), pages 81-92.
    3. EDAMURA Kazuma & Laura HERING & INUI Tomohiko & Sandra PONCET, 2011. "The Overseas Subsidiary Activities and Their Impact on the Performance of Japanese Parent Firms," Discussion papers 11069, Research Institute of Economy, Trade and Industry (RIETI).

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