Industrial groupings and foreign direct investment
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Date
2003-03
Authors
Blonigen, Bruce A.
Ellis, Christopher J.
Fausten, Dietrich
Journal Title
Journal ISSN
Volume Title
Publisher
University of Oregon, Dept of Economics
Abstract
We explore worldwide foreign direct investment location decisions by Japanese manufacturing firms from 1985 through 1991. Our conditional logit estimates provide evidence that firms’ location decisions are affected by membership in either vertical or horizontal keiretsu. Consistent with previous studies that stress agglomeration effects on firms’ location decisions, we find that the stock of investment in a region by a firm’s vertical keiretsu partners increases the probability of location. Further, we find that the recent flow of investment into a region by a firm’s horizontal keiretsu partners increases the probability of investment to the region, providing evidence of networking effects.
Description
Keywords
International economics, Financial economics, International factor movements and international business, Multinational firms, International business, Corporate finance and governance