Global Market Power of Japanese Multinational Firms

Kenta Yamanouchi, Kaoru Hosono and Miho Takizawa

Discussion papers from Research Institute of Economy, Trade and Industry (RIETI)

Abstract: We examine how the global market power of multinational firms has evolved and what factors have driven this evolution. To this end, we estimate the markups of foreign subsidiaries and their parent firms using a matched subsidiary-parent dataset of Japanese multinational firms covering the period from 2001 to 2018. Our main findings are as follows. First, the markups of foreign subsidiaries did not exhibit a long-run upward trend. Second, sales growth among foreign subsidiaries tended to be concentrated in firms with lower markups, contributing to a decline in the aggregate markup. Third, the parent firms’ markups had a sizable positive effect on the markups of their foreign subsidiaries. Fourth, certain host-country characteristics, such as GDP and the rule of law, were also associated with subsidiaries’ markups.

Pages: 29 pages
Date: 2025-09
New Economics Papers: this item is included in nep-com, nep-iaf and nep-sea
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Persistent link: https://EconPapers.repec.org/RePEc:eti:dpaper:25082

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