Networked FDI and third-country intra-firm trade

Author: Toshihiro Okubo、Yuta Watabe
Date: 2020/9/8
No: DP2020-014
JEL Classification codes: F12, F15
Language: English
[ Abstract ]

In the wave of globalization, foreign direct investment (FDI) is networked. Affiliates locate across countries and trade among them. This paper investigates the FDI networks, in particular, third-country intra-firm trade using the Japanese foreign affiliate data. We find active third-country sales and sourcing within the firm boundary, but only large firms tend to construct production networks. Driving forces for FDI networks are in the allocation of ownership and human resources by parent firms.