French, German, and Japanese FDI on Intra-East Asian Trade

Fung, K.C.; Aminian, Nathalie; Garcia-Herrero, Alicia; Iizaka, Hitomi; Ng, Francis

doi:2013.28.2.327

Journal of Economic Integration 2013 June;28(2) :327-353.
DOI: https://doi.org/10.11130/jei.2013.28.2.327

French, German, and Japanese FDI on Intra-East Asian Trade

K.C. Fung, Nathalie Aminian, Alicia Garcia-Herrero, Hitomi Iizaka, Francis Ng

University of California, Santa Cruz, U. S. A.
University of Rouen, Rouen, France
Emerging Markets, BBVA, Rouen, Hong Kong
Aoyama Gakuin University, Tokyo, Japan
World Bank, Washington DC, U. S. A.

Corresponding Author: K.C. Fung ,Email: kcfung@ ucsc.edu.

ABSTRACT

In this paper we first document the growing importance of intra-East Asian trade in parts and components and capital goods facilitated by foreign direct investment (FDI). Japanese direct investment has a stronger influence on intra-East Asian trade relative to FDI from France and Germany. It is related to the roles of small and medium enterprises in the Japanese FDI in East and Southeast Asia.

JEL Classification

F14: Empirical Studies of Trade
F15: Economic Integration
F23: Multinational Firms; International Business

Keywords: French FDI | German FDI | Japanese FDI | East and Southeast Asian Trade

REFERENCE

1.	Antras, Pol, 2005, “Incomplete contracts and the product cycle,” American Economic Review, vol. 95, No.4, pp. 1054-1073.

2.	Athukorala, P. C., 2006. “Product fragmentation and trade patterns in East Asia”, Asian Economic Papers, vol. 4, No. 3; pp. 1-27.

3.	Borrus, Michael, 1997, “Left for dead: Asian production networks and the revival of US electronics”, in B. Naughton (eds.), The China Circle Economics and Technology in the PRC, Taiwan, and Hong Kong, Washington, DC: Brookings Institution Press, pp.139-163.

4.	Borrus, M., D. Ernst and S. Haggard, 2000, “Introduction: cross-border production networks and the industrial integration of the Asia-Pacific region” in M. Borrus, D. Ernst and S. Haggard (eds.), International Production Networks in Asia: Rivalry or riches?, pp4-29. Routledge.

5.	Deardorff, A. V., 2001. “Fragmentation across cones”, in S. W. Arndt and H. Kierzkowski (eds.), Fragmentation: New Production Patterns in the World Economy, pp. 35-51. Oxford University Press.

6.	Ernst, Dieter, 2000. “Evolutionary Aspects: the Asian production networks of Japanese electronics firms”, in M. Borrus, D. Ernst and S. Haggard (eds.), International Production Networks in Asia: Rivalry or riches?, pp79-107. Routledge.

7.	Farrell, Roger Simon, 2008. Japanese Investment in the World Economy: A Study of Strategic Themes in the Internationalization of Japanese Industry, Edward Elgar Publishing.

8.	Feenstra, Robert C., James R. Markusen and Andrew K. Rose, 2001, “Using the gravity equation to differentiate among alternative theories of trade”, Canadian Journal of Economics, 34 (2), 430-437.

9.	Fung, K.C., 2002, “International Trade and Bank Groups: Welfare Enhancing or Welfare Reducing?” Journal of the Japanese and International Economies, 16, 212-226.

10.	Fung, K.C., Alicia Garcia-Herrero and Alan Siu, 2009, “Production Sharing in Latin America and East Asia,” in Sino-Latin American Economic Relation, eds. K.C. Fung and Alicia Garcia-Herrero, Routledge Press, forthcoming.

11.	Fung, K.C., Hitomi Iizaka and Alan Siu, 2010, “U.S., Japanese and Korean FDI and Intra-Regional East Asian Trade,” Asian Economic Papers, forthcoming.

12.	Gastanaga, V. M., J. B. Nugent and B. Pashamova, 1998. “Host country reforms and FDI inflows: How much difference do they make?” World Development, vol. 26, No. 7; pp. 1299-1314.

13.	Gereffi, G., Humphrey, J. and Sturgeon, T., 2005, “The Governance of Global ValueChains”, Review of International Political Economy, 12 (1), pp.78-104.

14.	Grossman, G. M. and E. Helpman, 2005. “Outsourcing in a global economy”, Review of Economic Studies, vol. 72, No. 1; pp. 135-159.

15.	Hanson, G. H., R. J. Mataloni, Jr., and M. J. Slaughter, 2001. “Expansion strategies of U.S. multinational firms”, in S. M. Collins and D. Rodrik (eds.), Brookings Trade Forum 2001, pp. 245-282. Washington, D.C., Brookings Institution Press.

16.	Hines, J. R., Jr., 1995. “Forbidden payment: Foreign bribery and American business after 1977”, National Bureau of Economic Research working paper, No. 5266. Cambridge, MA, United States.

17.	Hiratsuka, Daisuke, 2008. “Japan’s Outward FDI in the Era of Globalization”, in R. S. Rajan, R. Kumar and N. Virgill (eds.), New Dimensions of Economic Globalization: Surge of Outward Foreign Direct Investment from Asia, pp. 87-114. World Scientific Publishing Company, Incorporated.

18.	Hsiao, C., 2001. “Efficient estimation of dynamic panel data models – with an application to the analysis of foreign direct investment to developing countries,” paper prepared for the 2001 Econometric Society Far Eastern Meeting in Kobe, Japan.

19.	Hummels, D., J. Ishii and K-M Yi, 2001. “The nature and growth of vertical specialization in world trade”, Journal of International Economics, vol. 54, No. 1; pp. 75-96.

20.	Japanese Bank of International Cooperation, 2004. JBIC Review, May, Tokyo

21.	Jones, R. W., and H. Kierzkowski, 1990. “The role of services in production and international trade: A theoretical framework,” in R. Jones and A. Krueger (eds.), The Political Economy of International Trade: Festschrift in honor of Robert Baldwin, pp. 31-48. Oxford, Basil Blackwell.

22.	Jones, R. W., H. Kierzkowski and C. Lurong, 2004. “What does the evidence tell us about fragmentation and outsourcing”, International Review of Economics and Finance, vol. 14, No. 3; pp. 305-316.

23.	Krugman, P., 1995. “Growing world trade: Causes and consequences”, Brooking Papers on Economic Activity 1; pp. 327-377.

24.	White Paper on International Economy and Trade 2008, Ministry of Economy, Trade and Industry, Japan.

25.	Ng, F. and A. Yeats, 2003. “Major trade trends in East Asia: What are their implications for regional cooperation and growth?”, policy research working paper No. 3084, World Bank, Washington, D.C.

26.	———, 2001. “Production sharing in East Asia: Who does what for whom, and why?” in L. K. Cheng and H.

27.	Kierzkowski (eds.), Global Production and Trade in East Asia, pp. 63-109. Boston, Kluwer Academic.

28.	Sturgeon, T.J., 2003, “What really goes on in Silicon Valley? Spatial clustering and dispersal in modular production networks”, Journal of Economic Geography, 3, pp.199-225.

29.	Wakasugi, Ryuhei, 2007, “Vertical Intra-Industry Trade and Economic Integration in East Asia,” Asian Economic Papers, Winter, v.6, No.1, pp.26-39.

30.	Wei, S-J., 1997. “Why is corruption so much more taxing than tax? Arbitrariness kills”, National Bureau of Economic Research working paper, No. 6255. Cambridge, MA, United States.

31.	Zhang, Zhaoyong, 2010, "Trade Liberalization, Economic Growth and Convergence: Evidence From East Asian Economies", Journal of Economic Integration, National University of Singapore.