Internationalization of Japanese Firms : Evidence From Firm-level Data

This book takes a comprehensive look at Japanese firms engaging in export and foreign direct investment (FDI) and develops new methods and data to investigate the internationalization of firms, which is a focus issue in international trade. Using micro-level data, the book provides an introduction to theoretical and statistical analysis of internationalization modes of Japanese firms with productivity heterogeneity. It makes clear that although the productivity of internationalized Japanese firms is higher on average than that of firms serving only the domestic market, the difference in productivity between exporters and FDI firms is not as obvious in comparison with that of their counterparts in the United States and Europe. Focusing on this point, the book analyzes not only productivity heterogeneity among firms, but also the differences in firm-specific factors other than productivity: industry-specific factors, market-specific factors such as market size and variable and fixed costs for export, and FDI in destination countries. This in-depth investigation reveals how those factors make the modes of Japanese firms’ internationalization different from those in the United States and Europe. Further analysis focuses on the effects of match quality, organizational and institutional factors in the market on firms’ exports, and FDI. As an approach to the current trends in international trade, this book is unique in using detailed firm-level panel data drawn from Japanese government statistics. Front Matter....Pages i-ix Introduction and Overview....Pages 1-13 Features of Japanese Internationalized Firms: Findings Based on Firm-Level Data....Pages 15-45 Heterogeneity and the Structure of Export and FDI: A Cross-Industry Analysis of Japanese Manufacturing....Pages 47-72 The Role of Non-productivity Factors in the Internationalization of Firms....Pages 73-94 Entry into Foreign Markets Through Foreign Direct Investment....Pages 95-117 Productivity and Modes of Internationalization: Evidence from Japanese Firms....Pages 119-134 Foreign Direct Investment with Matching Frictions....Pages 135-150 Intra-Firm Trade and Contract Completeness: Evidence from Japanese Foreign-Affiliated Firms....Pages 151-169 Back Matter....Pages 171-173 4.1 Productivity Level by Firm4.2 Productivity Level by Industry; 5 Conclusion; Appendix: Data Sources and Variable Construction; Firm-Level Data; Labor Input; Value Added; Capital Stock; TFP; Exports and FDI; Sources and Data Construction for Sect. 2Sec184; References; Heterogeneity and the Structure of Export and FDI: A Cross-Industry Analysis of Japanese Manufacturing; 1 Introduction; 2 A First Glance at the Data; 3 Model; 3.1 Setup; 3.2 Prevalence of Internationalized Modes; 4 Empirical Specifications; 5 Results; 5.1 Robustness Check; 6 Concluding Remarks; Appendix; References The Role of Non-productivity Factorsin the Internationalization of Firms1 Introduction; 2 Empirical Methodology; 3 Data; 4 Econometric Results; 4.1 Benchmark Results; 4.2 Numerical Exercises; 4.3 Results for Each Industry; 4.4 Summary of the Empirical Results; 5 What Are the Non-productivity Factors of the Internationalization of Firms?; 6 Conclusion; References; Entry into Foreign Markets Through Foreign Direct Investment; 1 Introduction; 2 Overview of Japanese FDI; 3 Theoretical Framework; 4 Estimation for the Gravity Model; 5 Concluding Remarks; Appendix; References 2.2.1 Exporters and Export Intensity2.2.2 Increasing Amount of Exporting; 2.2.3 Industry Comparison; 3 Characteristics of Internationalized Firms; 3.1 Competitive Advantages of Internationalized Firms; 3.1.1 Employee, Value Added, Wage, Capital Intensity and Skill Intensity Premiums; 3.1.2 Changes in Premiums Over Time; 3.1.3 Productivity Premium; 3.2 Productivity Distribution of Firms; 3.3 Exports and Foreign-Owned Firms; 3.4 Internationalized Firms' Productivity Advantages: Self-Selection or Learning by Doing?; 4 Productivity Levels for Exporters and FDI-Led Firms Acknowledgments; Contents; Contributors; Editor; Authors; Introduction and Overview; 1 Increase of Exporters and FDI Firms; 2 Research Questions and Book Scope; 3 Features of Internationalized Firms; 4 Industry and Firm-Specific Factors; 5 Internationalization in Multiple Regions; 6 Management and Organization; References; Features of Japanese Internationalized Firms: Findings Based on Firm-Level Data; 1 Introduction; 2 Exporters in Japan; 2.1 Heterogeneity of Exporting Firms; 2.1.1 Dominance of Top Exporters; 2.1.2 Dominance Over Time; 2.2 Export Specialization Productivity and Modes of Internationalization: Evidence from Japanese Firms1 Introduction; 2 Productivity Premium of Internationalization: Statistical Evidence; 3 Productivity Cut-Off for Internationalization; 4 Internationalization Modes in North and South; 5 Choice of Internationalization Modes; 6 Conclusion; A.1 Appendix: List of Countries; References; Foreign Direct Investment with Matching Frictions; 1 Introduction; 2 The Model; 2.1 Preferences; 2.2 Production Technology; 2.3 Matching and Bargaining; 3 Properties of the Model; 3.1 Threshold Match Quality 3.2 Local Manager as a Entry Cost