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Identifier to cite or link to this item: https://hdl.handle.net/10086/15138

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Title
How do the Location Determinants of Vertical FDI and Horizontal FDI Differ?
Creator
Creator Name
Fukao, Kyoji Fukao, Kyoji
深尾, 京司 深尾, 京司
フカオ, キョウジ フカオ, キョウジ
Creator Name
Wei, Yuhong Wei, Yuhong
Editor
Contributor Name
社会科学における統計分析拠点構築 = Research Unit for Statistical Analysis in Social Sciences
Key Word
horizontal FDI
vertical FDI
location decision
Japan's FDI
Abstract
Distinguishing between vertical and horizontal foreign direct investment (FDI), this paper examines how the location determinants of the two types of FDI differ. Based on a conditional logit model and data on Japanese foreign affiliates, the main findings are that the most important determinant for horizontal FDI is a large market, whereas labor costs play a significant role in the case of vertical FDI. Concerning the effect of tariffs, geographical distance, and labor quality on the location decision, this study obtains results that differ from those of previous studies on the determinants of location choice of Japanese multinationals. First, tariffs and distance have opposite effects on the location decisions in the case of horizontal and vertical FDI. Second, labor quality has a positive effect only on the location decision of horizontal FDI.
Publisher
Institute of Economic Research, Hitotsubashi University
Issued Date
2008-01
Language
English(eng)
Resource Type
technical report
Version Type
VoR
Is Part OfRelation -
Related Title
Hi-Stat Discussion paper series, No. 233
Sponsorship
21世紀COEプログラム = 21st-Century COE Program
Appears in Collections
Hi-Stat Discussion paper series
URL
https://hdl.handle.net/10086/15138