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

Nobuaki Yamashita, Toshiyuki Matsuura and Kentaro Nakajima

AJRC Working Papers from Australia-Japan Research Centre, Crawford School of Public Policy, The Australian National University

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.

JEL-codes: F23 L22 R3 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2014
New Economics Papers: this item is included in nep-geo and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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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 (2013)
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