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Reconsidering the Backward Vertical Linkages of Foreign Affiliates: Evidence from Japanese Multinationals

Author

Listed:
  • Kozo Kiyota

    (Yokohama National University and Gerald R. Ford School of Public Policy, University of Michigan)

  • Toshiyuki Matsuura

    (Research Institute of Economy, Trade and Industry)

  • Shujiro Urata

    (Graduate School of Asia-Pacific Studies, Waseda University)

  • Yuhong Wei

    (Graduate School of Economics, Hitotsubashi University)

Abstract

This paper examines the determinants of the backward vertical linkages of Japanese foreign affiliates in manufacturing for the period 1994-2000, focusing on the local backward linkages, or local procurements in the host country. Our major findings are twofold. First, the unobserved affiliate-specific characteristics explain the large part of the variation of the backward linkages among foreign affiliates. Second, the experience of the affiliate has positive and sometimes non-linear impacts on local procurements for the affiliates, especially in Southeast Asia and China.

Suggested Citation

  • Kozo Kiyota & Toshiyuki Matsuura & Shujiro Urata & Yuhong Wei, 2007. "Reconsidering the Backward Vertical Linkages of Foreign Affiliates: Evidence from Japanese Multinationals," Working Papers 563, Research Seminar in International Economics, University of Michigan.
    • Handle: RePEc:mie:wpaper:563
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    File URL: http://fordschool.umich.edu/rsie/workingpapers/Papers551-575/r563.pdf
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    References listed on IDEAS

    as
    1. Kiyota, Kozo & Urata, Shujiro, 2008. "The role of multinational firms in international trade: The case of Japan," Japan and the World Economy, Elsevier, vol. 20(3), pages 338-352, August.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Vertical Backward Linkages; Foreign Direct Investment; Local Procurements; Southeast Asia; China;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory

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