Agglomeration effects of inter-firm backward and forward linkages: evidence from Japanese manufacturing investment in China

Nobuaki Yamashita, Toshiyuki Matsuura and Kentaro Nakajima

No 2012-042, Keio/Kyoto Joint Global COE Discussion Paper Series from Keio/Kyoto Joint Global COE Program

Abstract: This paper examines the agglomeration effects of multinational firms on the location decisions of first-time Japanese manufacturing investors in China for the period 1995-2007. This is accomplished by exploiting newly constructed measures of inter-firm backward and forward linkages formed in a home country. The conditional and mixed logit estimates reveal that agglomeration by first-tier suppliers and customers draws subsequent investment into a location. However, such agglomeration effects are not pervasive and do not extend to the second and third tiers. Instead, we find that agglomeration by third-tier suppliers generates a countervailing force, making a location relatively unattractive.

Pages: 24 pages
Date: 2013-03
New Economics Papers: this item is included in nep-geo, nep-int and nep-ure
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Agglomeration effects of inter-firm backward and forward linkages: Evidence from Japanese manufacturing investment in China (2014)
Working Paper: Agglomeration effects of inter-firm backward and forward linkages: evidence from Japanese manufacturing investment in China (2014)
Working Paper: Agglomeration effects of inter-firm backward and forward linkages: evidence from Japanese manufacturing investment in China (2014)
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