 Production Networks and Utilization of Free Trade Agreements by Japanese Subsidiaries in ASEANPublic Policy Review, 2020, vol. 16, issue 1, 121-134 Abstract: This paper examines the effects of the utilization of free trade agreements (FTAs) on international production networks. In order to utilize an FTA, it is necessary to comply with the rules of origin. To that end, companies need to limit, to some degree, procurement sources to suppliers located in the signatory countries of the FTA. In other words, companies may need to replace existing procurement sources located outside the FTA signatory countries with those located inside them. This restriction could result in the localization of companies’ international production networks. Therefore, this paper conducts an empirical analysis as to whether the utilization of an FTA leads to a significant increase in the local procurement share, with Japanese companies’ subsidiaries located within the ASEAN area used as subjects of the analysis. If the subsidiaries are found to be increasing local procurement excessively, it means that the utilization of an FTA has a negative impact on international production networks. Keywords: free trade agreement; rules of origin; accumulation (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:mof:journl:ppr16_01_06 Access Statistics for this article More articles in Public Policy Review from Policy Research Institute, Ministry of Finance Japan Contact information at EDIRC. |
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