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

Nobuaki Yamashita, Toshiyuki Matsuura and Kentaro Nakajima

Journal of the Japanese and International Economies, 2014, vol. 34, issue C, 24-41

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.

Keywords: Agglomeration; Backward and forward linkages; Location choice of multinational enterprises (search for similar items in EconPapers)
JEL-codes: F23 L22 R3 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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Related works:
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)
Working Paper: Agglomeration effects of inter-firm backward and forward linkages: evidence from Japanese manufacturing investment in China (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jjieco:v:34:y:2014:i:c:p:24-41

DOI: 10.1016/j.jjie.2014.04.001

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