KIYOTA Kozo (Faculty Fellow) /MATSUURA Toshiyuki/URATA Shujiro (Faculty Fellow) /WEI Yuhong
This paper examines the determinants of the backward vertical linkages of Japanese foreign affiliates in manufacturing for the period 1994-2000, focusing on the local backward linkages, or local procurements in the host country. We find that the experience of the affiliate, which is measured by the length of operation, had positive impacts on local procurements for the affiliates in East and Southeast Asian countries, especially China, but not for the affiliates in developed countries. This result is robust even after we control for various factors, including government regulation on local procurements, agglomeration effects, and unobservable firm heterogeneity.
Published: Toshiyuki Matsuura, 2008. "Reconsidering the Backward Vertical Linkage of Foreign Affiliates: Evidence from Japanese Multinationals," World Development, Vol. 36(8), pp. 1398-1414.