scholarly journals Globalization and Domestic Operations: Applying the JC/JD Method to Japanese Manufacturing Firms

2015 ◽  
Vol 14 (2) ◽  
pp. 1-35 ◽  
Author(s):  
Mitsuyo Ando ◽  
Fukunari Kimura
Keyword(s):  
Direct Investment ◽  
Multinational Enterprises ◽  
Firm Heterogeneity ◽  
Manufacturing Sector ◽  
Job Creation ◽  
Manufacturing Firms ◽  
Outward Foreign Direct Investment ◽  
Micro Data ◽  
Kolmogorov Smirnov ◽  
Smirnov Test

Does outward foreign direct investment accelerate de-industrialization at home or generate domestic jobs and operations? This paper applies the job creation (JC)/destruction (JD) method to micro data of Japanese manufacturing firms and provides a bird's eye view of the dynamism of globalizing firms in terms of domestic employment, domestic establishments, domestic affiliates, exports, and imports. It examines gross and net changes in domestic operations by multinational enterprises (MNEs) that expand operations abroad (expanding MNEs), compared with non-expanding MNEs and local firms, for the periods of 1998–2002, 2002–06, 2006–08, and 2008–10. It also conducts the Kolmogorov-Smirnov test to investigate whether the changes in domestic operations and trade by expanding MNEs are larger than those by other firm types. Major findings are the following: (1) gross changes in domestic employment and domestic operations are much larger than net changes, showing restructuring dynamism and firm heterogeneity; (2) de-industrialization or the shrinkage of the manufacturing sector is not relevant except for the period 1998–2002, though a slight declining trend in manufacturing activities is observed in recent years; (3) expanding multinational small- and medium-sized enterprises (SMEs) tends to enlarge domestic employment and domestic operations, compared with other types of SMEs; (4) expanding MNEs intensify headquarters activities; and (5) expanding multinational SMEs are likely to expand exports and imports more than other types of SMEs.

Determinants of OFDI: A Study of Indian Manufacturing Firms

2017 ◽  
Vol 3 (2) ◽  
Author(s):  
Juhi Lohani ◽  
Timsi Bhatia
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Manufacturing Sector ◽  
Manufacturing Firms ◽  
Medium Size ◽  
Outward Foreign Direct Investment ◽  
Investment Environment ◽  
Exporting Firms

The main focus of this study is to analyze the determinants of Outward Foreign Direct Investment of firms in the Manufacturing sector of India. The data used for this study is from 2008-2010. The study shows that Indian enterprises in the manufacturing sector are investing in other countries for efficiency seeking benefits. The results indicate that mainly medium size enterprises invest abroad. They are RandD intensive and import intensive. Further, they are not the exporting firms. These results point to the fact that the Indian enterprises invest abroad to manufacture goods in a foreign location due to better investment environment abroad. They import the goods, produced in the plants abroad into India. Thus it appears that Indian OFDI is not to promote exports.

scholarly journals Vertical spillovers from multinational enterprises: Does technological gap matter?

2016 ◽  
Vol 63 (3) ◽  
pp. 313-323 ◽  
Author(s):  
Rosanna Pittiglio ◽  
Filippo Reganati ◽  
Edgardo Sica
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Multinational Enterprises ◽  
Manufacturing Sector ◽  
Spillover Effect ◽  
Empirical Literature ◽  
Foreign Investors ◽  
Technological Gap ◽  
Local Companies ◽  
The Relationship

Foreign direct investment (FDI) from Multinational enterprises (MNEs) can augment the productivity of domestic firms insofar as knowledge ?spills over? from foreign investors to local producers. The capacity of local companies to exploit knowledge from MNEs can be affected by the technology gap between foreign and local enterprises at both horizontal (in the same industry) and vertical (in different industries) level. Whereas most of the empirical literature has focused exclusively on the analysis of horizontal and backward spillovers (i.e. between MNEs and local suppliers), the present paper also examines the relationship between FDI-related spillovers and technological gap in the Italian manufacturing sector at forward level (i.e. between MNEs and local buyers). Results suggest that at both intra-industry and forward level, the technological gap is of considerable importance for the spillover effect, particularly in the case of low-medium gap.

Political risk distribution of Chinese outward foreign direct investment

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Qiuyu GaoYan
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Multinational Enterprises ◽  
Risk Index ◽  
Political Risk ◽  
Principal Component ◽  
Government Support ◽  
Outward Foreign Direct Investment ◽  
Content Type ◽  
Risk Distribution

PurposeThe purpose of this paper is to contribute to a better understanding on relations between Chinese Outward Foreign Direct Investment (OFDI) and host country political risk. To contribute to a better understanding of whether traditional wisdom on foreign direct investment (FDI) is sufficient to explain the internationalization of Chinese multinational enterprises, the author collected 15 proxy variables from the PRS Group and Heritage Foundation and applied principal component analysis (PCA) to construct a new political risk index (PRI) that measures multiple facets of political risk for 139 countries.Design/methodology/approachUsing this new PRI as a criterion, the author investigated changes in the political risk distribution (PRD) of Chinese outward FDI (OFDI) regarding investment destinations, large projects, annual investment outflows and sectorial distributions from 2006–2017.FindingsThe author found that the vast majority of Chinese OFDI during this period is concentrated in moderate- and low-risk countries, even at the sectorial level. This paper also shows that the continuing reform of Chinese OFDI policy and strong government support have led to an unprecedented increase in Chinese OFDI, while the PRD of Chinese OFDI has maintained a gradual decline over the past decade.Originality/valueThis research provides a new measurement that covers multiple facets of political risk.

scholarly journals The Impact of Globalization on Establishment-Level Employment Dynamics in Japan

2015 ◽  
Vol 14 (2) ◽  
pp. 41-65 ◽  
Author(s):  
Naomi Kodama ◽  
Tomohiko Inui
Keyword(s):  
Multinational Enterprises ◽  
Census Data ◽  
Employment Growth ◽  
Job Creation ◽  
Manufacturing Firms ◽  
Employment Dynamics ◽  
Japanese Firms ◽  
Economic Census ◽  
The Impact ◽  
Overseas Subsidiaries

This study applies Davis, Haltiwanger, and Schuh's method ( 1996 ) to measure job creation/destruction rates of establishments in manufacturing firms using Japanese Economic Census data in 2006 and 2009. Results show that the decrease in net domestic employment arises mainly from firms without subsidiary companies, and non-expanding multinational enterprises. Domestic employment increases when the number of overseas subsidiaries increases. Both job creation/destruction rates of multinational enterprises are high, and the globalization of Japanese firms accelerates de-industrialization in Japan. The job creation and the net employment growth rates of establishments belonging to small-sized firms are lower than those in large-sized firms.

scholarly journals Foreign Direct Investment, Firm Heterogeneity, and Exports: An Analysis of Indian Manufacturing

2018 ◽  
Vol 35 (1) ◽  
pp. 27-51 ◽  
Author(s):  
Maitri Ghosh ◽  
Saikat Sinha Roy
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Multinational Enterprises ◽  
Firm Heterogeneity ◽  
Export Performance ◽  
Sunk Costs ◽  
Performance Estimation ◽  
Firm Level ◽  
Specific Factors ◽  
The Impact

Using firm-level data, this paper investigates whether foreign direct investment and the presence of multinational enterprises explains India's improved export performance during the postreform period. The recent literature stresses that firm heterogeneity gives some firms an edge over others to self-select into export markets. Apart from ownership, this paper considers firm heterogeneity and other firm-specific factors of export performance. Estimation results show that the impact of foreign ownership on export performance does not significantly differ from that of domestic firms across sectors in Indian manufacturing. Rather, firms build their international competitiveness by importing raw materials and foreign technical know-how, and by investing in research and development. Further, firm heterogeneity, measured in terms of sunk costs, significantly impacts firm-level export intensity. The study also reveals that there are ownership-specific factors that determine firm-level exports.

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