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Firm Heterogeneity and Different Modes of Internationalization: Evidence from Japanese Firms

Ryuhei Wakasugi () and Ayumu Tanaka

No 681, KIER Working Papers from Kyoto University, Institute of Economic Research

Abstract: This paper examines how differently productivity heterogeneity of firms sorts their export and foreign direct investment (FDI) between North and South as well as between single and multiple destinations. The empirical examinations based on 12,000 Japanese firm-level data present new findings; the rank of productivity differently sorts the internationalization modes between North (North America and Europe) and South (East Asia); the productivity of firms internationalizing in both North America and Europe is remarkably higher than that of firms internationalizing in either North America or Europe, regardless the modes of internationalization, export or FDI, even if the productivity of firms internationalizing in North America is similar to the productivity of firms in Europe. This paper confirms that the difference in wage rate or fixed costs causes different modes of internationalization from the standard theoretical prediction based on the Helpman-Melitz-Yeaple model.

Keywords: productivity-cutoff; export; FDI; North; South; East Asia (search for similar items in EconPapers)
JEL-codes: F10 F14 F23 (search for similar items in EconPapers)
Pages: 24pages
Date: 2009-09
New Economics Papers: this item is included in nep-int and nep-sea
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Persistent link: https://EconPapers.repec.org/RePEc:kyo:wpaper:681

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