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Networked FDI: Sales and Sourcing Patterns of Japanese Foreign Affiliates

Author

Listed:
  • Baldwin, Richard
  • Okubo, Toshihiro
Abstract
This paper applies a novel empirical approach to characterising the horizontal-ness and vertical-ness of affiliates based on Yeaple?s complex FDI concept. In its simplest form, horizontal-ness is measured as affiliates? local sales share while their vertical-ness is measures as their share of non-local sourcing of intermediates. Japanese affiliates in most sectors and nations are partly vertical and partly horizontal but those in North American are far more ?horizontal? than those in the EU and Asia. Affiliates became more vertical between 1996 and 2005. A four-way sales and sourcing split (host, home, regional and RoW) suggests that affiliates act as nodes in regional production networks ? especially in Asia. We posit several hypotheses that could be tested with our empirical approach.

Suggested Citation

  • Baldwin, Richard & Okubo, Toshihiro, 2012. "Networked FDI: Sales and Sourcing Patterns of Japanese Foreign Affiliates," CEPR Discussion Papers 8963, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:8963
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    More about this item

    Keywords

    Vertical and horizontal fdi; Complex fdi; Networked fdi; Sourcing; Sales; Japanese foreign affiliates; Multinationals;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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