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Firm Heterogeneity and FDI in Distribution Services
Author(s) -
Tanaka Kiyoyasu
Publication year - 2015
Publication title -
the world economy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.594
H-Index - 68
eISSN - 1467-9701
pISSN - 0378-5920
DOI - 10.1111/twec.12252
Subject(s) - multinational corporation , distribution (mathematics) , margin (machine learning) , production (economics) , foreign direct investment , business , consumption (sociology) , industrial organization , economics , microeconomics , mathematical analysis , social science , mathematics , finance , machine learning , sociology , computer science , macroeconomics
Distribution services play a large role in intermediating production and consumption across borders. Using firm‐level data on Japanese multinationals in wholesale and retail sectors, this study examines FDI decisions of distribution firms for local distribution services at the extensive and intensive margin. Consistent with the model of heterogeneous firms on multinational production, I find that more productive multinationals are more likely than less productive multinationals to enter a larger number of markets, to penetrate less attractive markets and to generate larger sales per each market. While these findings are consistent with previous evidence on manufacturing multinationals, I find some distinctive determinants of FDI in distribution services.