Japanese Foreign Direct Investment and Regional Trade

Gabrielle Lipworth and Tamim Bayoumi

No 1997/103, IMF Working Papers from International Monetary Fund

Abstract: We examine the relationship between Japanese FDI outflows, domestic and foreign fixed investment, and the exchange rate. The results indicate that aggregate FDI outflows have been driven by investment in Japan and the exchange rate, while the geographic distribution of such investment has been influenced by foreign economic conditions. We also find that FDI outflows have a temporary impact on exports but a permanent effect on imports. We find no evidence that behavior with respect to East Asia differs from that with respect to North America or Europe.

Keywords: WP; FDI outflow; FDI flow; stock of FDI; FDI; Hollowing Out; Trade Linkages; FDI inflow; FDI regression; FDI stock; Foreign direct investment; Real exchange rates; Stocks; Exports; Trade balance; East Asia; North America; Asia and Pacific; Northern Europe (search for similar items in EconPapers)
Pages: 35
Date: 1997-08-01
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Citations: View citations in EconPapers (20)

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Journal Article: Japanese foreign direct investment and regional trade (1998)
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Persistent link: https://EconPapers.repec.org/RePEc:imf:imfwpa:1997/103

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