Networked FDI: Sales and Sourcing Patterns of Japanese Foreign Affiliates

摘要

The theory of multinational corporations answers two questions: Why is production multi-national, and why is it owned by one corporation? Canonical foreign direct investment (FDI) theory concentrates on the first question and proposes two answers that define two types of FDI: horizontal (Markusen, 1984) and vertical (Helpman, 1984). The former has production being multinational to avoid trade costs ('market seeking'); the latter has production stages dispersed to exploit cost differences ('efficiency seeking'). See Antras and Yeaple (2013) for a survey. The relative importance of the two motives is an empirical question whose answer has evolved. The first modern tests identified motives by correlating measures of FDI with host nation size (market seeking) and host-home nation costs differences (efficiency seeking). These studies find horizontal motives to be dominant (Carr, Markusen and Maskus, 2001; Blonigen et al., 2003; and Markusen and Maskus, 2002). See Blonigen (2005) and Navaretti and Venables (2004) for surveys.