Is starting FDI more productive than staying at home? Manufacturing and service sectors in Japan

Ito, Yukiko

doi:10.1080/09638199.2013.877064

Cited by 4 publications

(3 citation statements)

References 20 publications

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“…Nonetheless, some empirical findings suggest that there are positive learning effects that provide performance upgrading at home. Navaretti and Castellani (2004) and Imbriani et al (2011) for Italian manufacturing firms, Wei et al (2010) for Chinese firms, Ito (2015) and Hayakawa et al (2016) for Japanese firms Hijzen et al (2011) for French firms, among others, claim positive impact of outward FDI on parent firms productivity. However, other works analysing the learning effect in investing abroad fail in detecting a positive and significant causal effect (see, for instance, Hijzen et al, 2007) for manufacturing firms.…”

Section: Literature Review and Theoretical Frameworkmentioning

confidence: 97%

Outward Foreign Direct Investment, Restructuring and Performance Upgrading: Firm-level Evidence from Portugal

Barbosa

2020

Global Business Review

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This article assesses the causal relationship between outward foreign direct investment (FDI) and various sides of firm performance, using micro data from Portuguese manufacturing firms during 2006–2014. To control for the possible endogeneity of outward FDI strategies, propensity score matching is combined with difference-in-difference approach. Our analysis shows that the learning effects for parent firms in Portuguese manufacturing depend on the underlying outward FDI strategy. The findings suggest that outward FDI could contribute to enhance firms’ productivity and their scale of operations. However, those learning effects seem to be mostly visible when firms engage in vertical outward FDI. Further, outward FDI, vertical or horizontal, appears to enhance the integration of Portuguese firms into the global economy through increased export intensity. From a managerial and policy perspective, the findings support the argument that outward FDI can indeed be at root of upgrading performance and firm’s restructuring in a small, open and peripheral economy such as Portugal.

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Section: Literature Review and Theoretical Frameworkmentioning

confidence: 97%

Outward Foreign Direct Investment, Restructuring and Performance Upgrading: Firm-level Evidence from Portugal

Barbosa

2020

Global Business Review

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“…However, the results obtained remain inconclusive. For example, Navaretti and Castellani (2004) found significant positive effects, but Hijzen et al (2007) and Ito (2015) did not. Therefore, more detailed analyses are required to derive meaningful conclusions regarding the effect of MNEs' FDI on their performance at home.…”

mentioning

confidence: 90%

“…Examples of studies in this field include those by Navaretti and Castellani (2004), Castellani et al (2008), and Imbriani et al (2011) for Italian MNEs; Hijzen et al (2011) for French MNEs; Navaretti et al (2010) for French and Italian MNEs; Kleinert and Toubal (2007) for German MNEs;Ito (2015), Hijzen et al (2007), and Edamura et al (2011) for Japanese MNEs; Debaere et al (2010) for Korean MNEs; and Masso et al (2008) for Estonian MNEs. The econometric identification of the learning effect is one of the most important issues in this literature.…”

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confidence: 96%

How Does FDI Affect Productivity at Home?: Evidence from a Plant-Level Analysis

Hayakawa¹,

Matsuura

Motohashi

2016

J Ind Compet Trade

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This study investigates the effect of foreign direct investments (FDI) on home productivity using plant-level data rather than firm-level data. Our results are consistent with the theoretical predictions. Horizontal FDI (HFDI) does not have a significantly positive effect on home productivity in plants that have the same activities abroad. In contrast, vertical FDI (VFDI) significantly enhances productivity in plants with an input-output relationship with activities relocated abroad. Furthermore, focusing on FDI in East Asia, the productivity improvements at home through VFDI are even greater, which might be caused by significant differences in factor prices between Japan and host countries.

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Entry of Foreign Multinational Firms and Productivity Growth of Domestic Firms: The Case for Japanese Firms

Ito

2017

Competition, Innovation, and Growth in Japan

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This paper examines whether and how the entry of foreign multinational firms affects productivity growth of domestically owned firms, using Japanese firm-level data for the period 2000-2007. Although there are a considerable number of studies conducting productivity analyses on foreign multinationals and domestic firms for the manufacturing sector, there are few such studies for the service sector. Against this background, the present paper focuses on the role of foreign entry in the service sector, where cross-border trade is often difficult and firms are therefore less likely to be exposed to international competition. The results of the analysis suggest that foreign multinationals perform better than domestically owned firms in many sectors. However, although the productivity levels of the former tend to be higher than those of the latter, no significant difference in productivity growth rates is found. Moreover, once firm-fixed effects are controlled for, foreign presence in a particular industry tends to negatively affect the productivity growth rate of domestically owned firms in the industry. However, firms that are catching up with the productivity frontier enjoy positive FDI spillovers, implying that foreign entry accelerates productivity catch-up.

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Is starting FDI more productive than staying at home? Manufacturing and service sectors in Japan

Cited by 4 publications

References 20 publications

Outward Foreign Direct Investment, Restructuring and Performance Upgrading: Firm-level Evidence from Portugal

Outward Foreign Direct Investment, Restructuring and Performance Upgrading: Firm-level Evidence from Portugal

How Does FDI Affect Productivity at Home?: Evidence from a Plant-Level Analysis

Entry of Foreign Multinational Firms and Productivity Growth of Domestic Firms: The Case for Japanese Firms

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