Parts and Components Trade and Trade Policies in East and South-East Asian Countries

点击翻译按钮获取中文摘要

Using the dataset of parts and components trade and Japanese FDI, we investigate the influence of FDI by Japanese firms on parts and components exports. Controlling endogeneity problems in estimation, we find that the positive effect of FDI on parts and components exports from Japan to the host countries. We also find that the demand of the Japanese market is important factor to determine the FDI and hence the volume of parts and components trade between Japan and the host countries. These findings imply that vertical production structure based on the factor endowments of the host countries has been developed by FDI-induced production networks.