Do international flights promote FDI?: the role of face-to-face communication

Kiyoyasu Tanaka

No 554, IDE Discussion Papers from Institute of Developing Economies, Japan External Trade Organization(JETRO)

Abstract: Air transportation facilitates face-to-face interactions across borders for the spatial expansion of manufacturing production. I investigate the impact of international flights on FDI entry by Japanese firms. I find that FDI entry significantly increases with the weekly frequency of flights from Japan, and the positive impact increases with a proxy for an intensity of face-to-face communication between the parent firm and foreign affiliate. The results are robust to estimation methods, additional control variables, and definitions of face-to-face communication. Thus, the results suggest that flights encourage FDI entry through a reduction in face-to-face communication costs.

Keywords: Japan; Air transport; Foreign investments; Direct Flight; FDI; Face-to-Face Contact (search for similar items in EconPapers)
JEL-codes: F21 F23 L9 (search for similar items in EconPapers)
Date: 2016-02-01
New Economics Papers: this item is included in nep-bec, nep-geo and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Published in IDE Discussion Paper = IDE Discussion Paper, No. 554. 2016-02-01

Downloads: (external link)
https://ir.ide.go.jp/record/37629/files/IDP000554_001.pdf First version, 2016 (application/pdf)

Related works:
Journal Article: Do international flights promote FDI? The role of face‐to‐face communication (2019)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:jet:dpaper:dpaper554

Ordering information: This working paper can be ordered from
Publication Office, IDE 3-2-2 Wakaba, Mihama-ku, Chiba-shi, Chiba 261-8545 JAPAN
http://www.ide.go.jp/English/Publish/Order

Access Statistics for this paper

More papers in IDE Discussion Papers from Institute of Developing Economies, Japan External Trade Organization(JETRO) Contact information at EDIRC.
Bibliographic data for series maintained by Michitaka Imamitsu ().