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Identifier to cite or link to this item: https://hdl.handle.net/10086/27775

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Title
Impact of supply chain network structure on FDI: Theory and evidence
Creator
Creator Name
Itoh, Ryo Itoh, Ryo
Affiliation
Affiliation Name
Tohoku University
Creator Name
Nakajima, Kentaro Nakajima, Kentaro
Affiliation
Affiliation Name
Tohoku University
Key Word
FDI
network game
supply chain
Katz-Bonacich centrality
JEL
D20
D85
F23
Abstract
This study investigates how the structure of a supply chain network influences the FDI decisions of firms embedded in the network. We theoretically describe firms' FDI decisions through a coordination game of a fixed network with incomplete information. We show that the network effect in the equilibrium can be represented by Katz-Bonacich centrality. Firms with a larger Katz-Bonacich centrality than other firms are more likely to engage in FDI. We empirically test this prediction with disaggregated inter-firm transaction network data of 115,111 Japanese firms and confirm that the Katz-Bonacich centrality has a significantly positive, robust effect on firms' FDI engagements.
Publisher
Institute of Economic Research, Hitotsubashi University
Issued Date
2016-03
Language
English(eng)
Resource Type
technical report
Version Type
VoR
Is Part OfRelation -
Related Title
HIT-REFINED Working Paper Series ; No. 49
Number of Pages
53
Sponsorship
基盤研究(S) = Grants-in-Aid for Scientific Research (S)
Appears in Collections
Working Paper Series / Real Estate Markets, Financial Crisis, and Economic Growth An Integrated Economic Approach
URL
https://hdl.handle.net/10086/27775