Research on Changes in Multinational Corporations, Trade Structures, and Market Institutions

2009

In recent times, China has accomplished remarkable economic development and among developing countries has the strongest economic relationship with Japan. China is now Japan's largest trading partner and Japan is the third largest trading partner for China. Japan is also the second largest provider of foreign direct investment into China. It is this close economic relationship between the two countries that prompted policymakers and researchers to clarify the mechanism that supports China's current economic development. RIETI and the Development Research Center of the State Council of the People's Republic of China concluded an agreement for research cooperation in 2006, which has allowed RIETI to conduct in-depth analyses of the Chinese economy. This research project thus conducts various empirical analyses using industrial and firm-level data from China and Japan to uncover the important aspects of the Chinese economy such as the spillovers from the increased presence of foreign invested enterprises (FIEs) or the internationalization of indigenous Chinese firms.

2007 - 2008

Notable research topics in the field of international economics include the growth of foreign direct investment, expansion of overseas production and outsourcing; technology licensing and the protection of intellectual property rights; the trade expanding effects of FTAs; and, the effectiveness of trade restrictive measures based on tariffs and anti-dumping actions. These issues have already been analyzed in the context of trade theory, theory of the firm and contract theory. However, not enough has been done in empirical examination. This applies to Japan as well as to other countries. The purpose of this project is to quantitatively analyze current issues in the above topics based on international trade data by commodity industry-level data and firm-level data for Japanese firms. In addition, we will quantitatively assess the effects of policies and systems, and discuss the implications for trade and industrial policies.

2006

The globalization is bringing great changes to the international economic environment for Japan. We will review the current state of globalization in Japan from three perspectives: (1) market institutions, (2) international trade structures, and (3) trade policy. (1) Market conditions are major determinants of international trade, foreign direct investment, and technology transfers, but their quantitative analysis is inadequately developed. In our research we will study the importance of market conditions by developing indicators, and analyze the impact on trade, investment, and research and development (R&D). One topic includes the impact of cross-country differences in the intellectual property rights (IPR) protection on technology transfers. (2) Amid the globalization, the Japanese international division of labor is becoming more complex. By analyzing the split of manufacturing processes by Japanese firms and relating it with the firms' R&D and scale, we will cast light on the state of outsourcing, in particular the outsourcing of production. (3) The advance of economic globalization is making it increasingly important to seriously consider the costs and benefits of safeguard measures in trade policy. We take up the United States' experience as a case study, and re-examine the importance of these policies.

July 1, 2007 - March 31, 2011