Vertical linkages and agglomeration effects in Japanese FDI in Thailand |
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| Institution: | 1. Centre for Policy Research and International Studies, Universiti Sains Malaysia, 11800 USM, Penang, Malaysia;2. School of Quantitative Sciences, College of Arts and Sciences, Universiti Utara Malaysia, 06010 Sintok, Kedah, Malaysia;3. Faculty of Economics and Administrative Sciences, Cag University, 33800 Mersin, Turkey;1. Faculty of Commerce, Chuo University, 742-1 Higashi Nakano, Hachioji, Tokyo 192-0393, Japan;2. School of Political Science and Economics, Waseda University, 1-6-1 Nishi Waseda, Shinjuku-ku, Tokyo 169-8050, Japan;3. Faculty of Business and Commerce, Keio University, 2-15-45 Mita, Minato-ku, Tokyo 108-8345, Japan;1. Faculty of Economics, Okayama Shoka University, 2-10-1, Tsushima Kyomachi, Kita-ku Okayama, Japan;2. Professor Graduate School of Economics, Kobe University, Rokkodai 2-1, Nada-ku, Kobe, 657–8501, Japan |
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| Abstract: | This paper formally investigates how industrial linkages between Japanese firms in Thailand affect the inter-industry pattern of FDI. It does so in the context of a model of FDI where production is vertically integrated between the home and host economies, using a distinctive industry data set constructed from firm-level information. The econometric evidence indicates that, in addition to the factors that facilitate vertical integration (lower transport costs, lower labour cost, etc.), the opportunity to create industrial linkages or supply networks leads to additional clustering or agglomeration of FDI. J. Japanese Int. Economies 20 (2) (2006) 193–208. |
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