The growing importance of global production sharing makes the nexus between outward foreign direct investment (FDI) and trade in intermediate goods ever more important. This study employs newly-constructed product-level data covering 32 products and 49 host countries over the period 1993-2008 and finds evidence that FDI by upstream firms leads to additional exports of intermediate goods from the home country. The finding of a complementary relationship between FDI and intermediate exports from Japan runs counter to the popular view that the growing overseas activity of multinational enterprises could replace intermediate exports from a home country, thereby depriving the home country of job opportunities.
|Journal||Journal of the Japanese and International Economies|
|Publication status||Published - 2013|