Hitomi Iizaka - Academia.edu (original) (raw)

Papers by Hitomi Iizaka

Research paper thumbnail of Foreign Direct Investment in China and East Asia

Edward Elgar Publishing eBooks, Mar 31, 2008

Research paper thumbnail of Multilateral Trade Negotiations in the GATT and the WTO: Lessons for Asia

Asian economic papers, Mar 1, 2004

This paper aims to help Asian trade negotiators by examining the processes and results of the Uru... more This paper aims to help Asian trade negotiators by examining the processes and results of the Uruguay Round. Analysts argue that trade negotiations are based on mercantilistic rules. But the actual outcome of the Uruguay Round suggests that trade bargaining was not based on strict reciprocity. In terms of tariff reductions, Asian economies received more than they gave, but relative to tariff bindings, Asian economies gave more than they received. Asian economies that undertook trade reforms prior to the trade talks did not lose bargaining power. The paper also presents econometric evidence on the determinants of bargaining power of nations.

Research paper thumbnail of Japanese Direct Investment in China and Other Asian Countries

This paper examines the recent trends, characteristics and determinants of Japanese direct invest... more This paper examines the recent trends, characteristics and determinants of Japanese direct investment in China. To study these issues, we first use qualitative and survey data to compare Japanese direct investment in China with similar investment in other Asian countries. We found that within Asia, China is the largest recipient of Japanese direct investment, with Hong Kong and Thailand coming in second and third. 76.5% of Japanese direct investment in China is in manufacturing. Such concentration in manufacturing is typical for Japanese investment in developing Asia, but rather unusual compared with Japanese investment in other developed countries. Almost one-third of Japanese investment in China is in electrical machinery. 40% of Japanese firms invest in China for cost reasons, while 21% say that they invest in China to expand market shares in China. In 1999, Japanese affiliates in China procure 47% of their inputs from China and sold 47% of the goods locally in China. We also examine econometrically the determinant of Japanese direct investment in various regions of China and compare these locational factors for direct investment from Hong Kong, the largest foreign investor in China. We found that Hong Kong companies place a stronger emphasis on labor costs and a smaller emphasis on labor quality compared to Japanese multinationals. In addition, Japanese firms prefer Economic and Technology Development Zones (ETDZs) while Hong Kong firms are attracted to Special Economic Zones (SEZs).

Research paper thumbnail of Production Sharing In East Asia

Institute of Developing Economies, JETRO eBooks, 2007

Research paper thumbnail of Foreign Trade of China

On December 11, 2001, China officially joined the World Trade Organization (WTO) and became its 1... more On December 11, 2001, China officially joined the World Trade Organization (WTO) and became its 143rd member. China’s presence in the world economy will continue to grow and deepen. The foreign trade sector plays an important and multifaceted role in China’s economic development. At the same time, China’s expanded

Research paper thumbnail of FTA in Asia: Impacts of CEPA and China-ASEAN FTA on Hong Kong's Economy

Research paper thumbnail of Modes of East Asian Trade and Foreign Direct Investment: U.S. and Japan

AbstractThe following sections are included:INTRODUCTIONPATTERNS OF TRADE IN EAST ASIAFOREIGN DIR... more AbstractThe following sections are included:INTRODUCTIONPATTERNS OF TRADE IN EAST ASIAFOREIGN DIRECT INVESTMENT IN EAST ASIAGRAVITY EQUATIONESTIMATION RESULTSCONCLUSIONACKNOWLEDGMENTSAPPENDIX 1APPENDIX 2REFERENCESComment

Research paper thumbnail of International Competition for Foreign Direct Investment: The Case of China

There is a large literature on the determinants of foreign direct investment. In recent years, Ch... more There is a large literature on the determinants of foreign direct investment. In recent years, China emerges as the largest recipient of foreign direct investment. Is China taking direct investment away from other Asian economies? Theoretically, a growing China can add to other countries’ direct investment by creating more opportunities for production networking and by raising demand for raw materials and resources. At the same time, relatively low Chinese labor costs may lure multinationals away from other Asian sites when multinationals consider alternative locations for low-cost export platforms. In this paper, we explore this important issue empirically. We use data from eight Asian economies (Hong Kong, Taiwan, Republic of Korea, Singapore, Malaysia, Philippines, Indonesia, and Thailand) from 1985 to 2001 and control for the determinants of their inward foreign direct investment (FDI). We then add China’s FDI inflows as an indicator of the “China Effect”. Due to possible simult...

Research paper thumbnail of U.S., Japanese and Korean Foreign Direct Investment and the Various Modes of East Asian Trade

In this paper we document the growing importance of intra-East Asian trade of parts and component... more In this paper we document the growing importance of intra-East Asian trade of parts and components. Our empirical analysis shows that FDI does play an important and independent or exogenous role in facilitating the trade of parts and components in East Asia. This is true for aggregate FDI as well as FDI from individual countries, including investment from the United States, Japan and South Korea. Using Antras (2005) basic taxonomy, East Asia remains at Stage II of the product cycle of offshoring. Our empirical studies also show that FDI from Japan has a particularly strong influence on both trade in parts and components as well as trade in capital goods.

Research paper thumbnail of Production Sharing In East Asia

Research paper thumbnail of Bilateral Import Demand Functions: The Case For Hong Kong SAR

Research paper thumbnail of Foreign Direct Investment, Intra-Regional Trade and Production Sharing in East Asia

Research paper thumbnail of Trade in Components and Parts and Foreign Direct Investment in East Asia

Research paper thumbnail of An Econometric Estimation of Locational Choices of Foreign Direct Investment: The Case of Hong Kong and U.S. Firms in China

SSRN Electronic Journal, 2003

This paper examines the locational choices of Hong Kong and U.S. direct investments (DI) in China... more This paper examines the locational choices of Hong Kong and U.S. direct investments (DI) in China using a regional data set from 1990 to 1999. The results of the panel regressions show that there are various similarities and differences in the significance and the magnitudes of the determinants of DI between these two sources. Local GDP significantly affects the inflows of both types of investments, but U.S. investment is more sensitive to local demand. The lagged wage variable negatively affects both Hong Kong and U.S. investment, but Hong Kong investment is more sensitive to local labor cost. A rise in regional labor quality raises both investment inflows, but the quality index exerts a stronger influence on U.S. investment. These econometric estimates can be understood in light of two stylized facts of U.S. and Hong Kong investments in China. First, the motive of U.S. firms investing in China is primarily to sell in China, whereas Hong Kong firms tend to invest in China to take advantage of the low labor costs and then to export. Second, U.S. investments in China tend to be more capital-and skilled-intensive than those from Hong Kong.

Research paper thumbnail of The Effects and Implications of Foreign Direct Investment in China for Other Developing Economies: Hollowing Out or Filling in?

China into the Hu-Wen Era, 2006

Research paper thumbnail of The Political Economy of the Japanese Yen and the U.S.-Japan Trade Conflict

SSRN Electronic Journal, 2003

In this paper, we use a version of the Dixit-Grossman-Helpman (1997) common agency model and appl... more In this paper, we use a version of the Dixit-Grossman-Helpman (1997) common agency model and apply the lobbying framework to exchange rate policies. In particular, we formalize Ron McKinnon's idea that the appreciation of the Japanese yen in the past was due to trade pressure applied by the U.S. government. We extend the theory to examine the case where the Japanese firms are modeled as a coalition of shareholders and incumbent employees (Aoki 1988). We conclude by pointing out that this approach is applicable and relevant to the current disputes on the level of the Yuan exchange rate between the U.S. policymakers and the Chinese government.

Research paper thumbnail of FDI Flows to Latin America, East and Southeast Asia, and China: Substitutes or Complements?

Review of Development Economics, 2010

Is China diverting foreign direct investment (FDI) from other developing countries? Theoretically... more Is China diverting foreign direct investment (FDI) from other developing countries? Theoretically, a growing China augments other countries' FDI by creating more production networking and raising demand for resources. However, low Chinese costs lure multinationals away from other production sites. Here we explore this issue empirically. We focus on East and Southeast Asia and Latin America for 1985–2002. We control for the standard determinants of inward FDI, then add China FDI to represent the “China Effect.” We found that China's FDI is positively related to FDI in Asia, while the China Effect is insignificant for Latin America. Also the China Effect is generally not the most important determinant of other countries' FDI. Market sizes and policies such as corporate tax rates and openness tend to be more important.

Research paper thumbnail of Japanese and US Trade with China: A Comparative Analysis

Review of Development Economics, 1998

The paper provides a simple comparative analysis of Japanese and US trade with China. In recent y... more The paper provides a simple comparative analysis of Japanese and US trade with China. In recent years, Japanese exports to China had been growing faster than US exports, but Japanese imports from China had been growing more slowly. A large amount of US and Japanese exports were first shipped to Hong Kong, and then re‐exported to China. In 1994, Japan's largest export item to China was general machinery, while US largest export item to China was transportation equipment. According to the rivalry index constructed in the paper, competition in 1994 between US and Japanese firms was most intense in the chemical goods sector.

Research paper thumbnail of French, German, and Japanese FDI on Intra-East Asian Trade

Journal of Economic Integration, 2013

Research paper thumbnail of Determinants of U.S. and Japanese Direct Investment in China

Journal of Comparative Economics, 2002

This paper examines the determinants of FDI from U.S. and Japan in China using the provincial dat... more This paper examines the determinants of FDI from U.S. and Japan in China using the provincial data set from 1991 to 1997. The results of the regression analyses are further compared to those of the aggregated FDI without U.S. and Japan as a benchmark case. The study found various similarities and differences in the importance and the magnitudes of the determinants of FDI among three FDI sources. It is shown that both level of GDP and the lagged GDP significantly affects inflow of FDI from all sources. The hypothesis that the good quality of infrastructure is conductive to attract FDI is strongly supported for all FDI sources, although the magnitude of the impact of the variable varies. The policy variables are also found to have significant positive effects on FDI. The labor quality exerts larger influence on Japanese FDI than on U.S. FDI, which may reflect the different structure for coordinating activities between U.S. and Japanese firms. The results for the wage variables are inconclusive. The study also shows the marginal support for the positive effect of cultural proximity between Japanese FDI and the provinces of Manchuria.

Research paper thumbnail of Foreign Direct Investment in China and East Asia

Edward Elgar Publishing eBooks, Mar 31, 2008

Research paper thumbnail of Multilateral Trade Negotiations in the GATT and the WTO: Lessons for Asia

Asian economic papers, Mar 1, 2004

This paper aims to help Asian trade negotiators by examining the processes and results of the Uru... more This paper aims to help Asian trade negotiators by examining the processes and results of the Uruguay Round. Analysts argue that trade negotiations are based on mercantilistic rules. But the actual outcome of the Uruguay Round suggests that trade bargaining was not based on strict reciprocity. In terms of tariff reductions, Asian economies received more than they gave, but relative to tariff bindings, Asian economies gave more than they received. Asian economies that undertook trade reforms prior to the trade talks did not lose bargaining power. The paper also presents econometric evidence on the determinants of bargaining power of nations.

Research paper thumbnail of Japanese Direct Investment in China and Other Asian Countries

This paper examines the recent trends, characteristics and determinants of Japanese direct invest... more This paper examines the recent trends, characteristics and determinants of Japanese direct investment in China. To study these issues, we first use qualitative and survey data to compare Japanese direct investment in China with similar investment in other Asian countries. We found that within Asia, China is the largest recipient of Japanese direct investment, with Hong Kong and Thailand coming in second and third. 76.5% of Japanese direct investment in China is in manufacturing. Such concentration in manufacturing is typical for Japanese investment in developing Asia, but rather unusual compared with Japanese investment in other developed countries. Almost one-third of Japanese investment in China is in electrical machinery. 40% of Japanese firms invest in China for cost reasons, while 21% say that they invest in China to expand market shares in China. In 1999, Japanese affiliates in China procure 47% of their inputs from China and sold 47% of the goods locally in China. We also examine econometrically the determinant of Japanese direct investment in various regions of China and compare these locational factors for direct investment from Hong Kong, the largest foreign investor in China. We found that Hong Kong companies place a stronger emphasis on labor costs and a smaller emphasis on labor quality compared to Japanese multinationals. In addition, Japanese firms prefer Economic and Technology Development Zones (ETDZs) while Hong Kong firms are attracted to Special Economic Zones (SEZs).

Research paper thumbnail of Production Sharing In East Asia

Institute of Developing Economies, JETRO eBooks, 2007

Research paper thumbnail of Foreign Trade of China

On December 11, 2001, China officially joined the World Trade Organization (WTO) and became its 1... more On December 11, 2001, China officially joined the World Trade Organization (WTO) and became its 143rd member. China’s presence in the world economy will continue to grow and deepen. The foreign trade sector plays an important and multifaceted role in China’s economic development. At the same time, China’s expanded

Research paper thumbnail of FTA in Asia: Impacts of CEPA and China-ASEAN FTA on Hong Kong's Economy

Research paper thumbnail of Modes of East Asian Trade and Foreign Direct Investment: U.S. and Japan

AbstractThe following sections are included:INTRODUCTIONPATTERNS OF TRADE IN EAST ASIAFOREIGN DIR... more AbstractThe following sections are included:INTRODUCTIONPATTERNS OF TRADE IN EAST ASIAFOREIGN DIRECT INVESTMENT IN EAST ASIAGRAVITY EQUATIONESTIMATION RESULTSCONCLUSIONACKNOWLEDGMENTSAPPENDIX 1APPENDIX 2REFERENCESComment

Research paper thumbnail of International Competition for Foreign Direct Investment: The Case of China

There is a large literature on the determinants of foreign direct investment. In recent years, Ch... more There is a large literature on the determinants of foreign direct investment. In recent years, China emerges as the largest recipient of foreign direct investment. Is China taking direct investment away from other Asian economies? Theoretically, a growing China can add to other countries’ direct investment by creating more opportunities for production networking and by raising demand for raw materials and resources. At the same time, relatively low Chinese labor costs may lure multinationals away from other Asian sites when multinationals consider alternative locations for low-cost export platforms. In this paper, we explore this important issue empirically. We use data from eight Asian economies (Hong Kong, Taiwan, Republic of Korea, Singapore, Malaysia, Philippines, Indonesia, and Thailand) from 1985 to 2001 and control for the determinants of their inward foreign direct investment (FDI). We then add China’s FDI inflows as an indicator of the “China Effect”. Due to possible simult...

Research paper thumbnail of U.S., Japanese and Korean Foreign Direct Investment and the Various Modes of East Asian Trade

In this paper we document the growing importance of intra-East Asian trade of parts and component... more In this paper we document the growing importance of intra-East Asian trade of parts and components. Our empirical analysis shows that FDI does play an important and independent or exogenous role in facilitating the trade of parts and components in East Asia. This is true for aggregate FDI as well as FDI from individual countries, including investment from the United States, Japan and South Korea. Using Antras (2005) basic taxonomy, East Asia remains at Stage II of the product cycle of offshoring. Our empirical studies also show that FDI from Japan has a particularly strong influence on both trade in parts and components as well as trade in capital goods.

Research paper thumbnail of Production Sharing In East Asia

Research paper thumbnail of Bilateral Import Demand Functions: The Case For Hong Kong SAR

Research paper thumbnail of Foreign Direct Investment, Intra-Regional Trade and Production Sharing in East Asia

Research paper thumbnail of Trade in Components and Parts and Foreign Direct Investment in East Asia

Research paper thumbnail of An Econometric Estimation of Locational Choices of Foreign Direct Investment: The Case of Hong Kong and U.S. Firms in China

SSRN Electronic Journal, 2003

This paper examines the locational choices of Hong Kong and U.S. direct investments (DI) in China... more This paper examines the locational choices of Hong Kong and U.S. direct investments (DI) in China using a regional data set from 1990 to 1999. The results of the panel regressions show that there are various similarities and differences in the significance and the magnitudes of the determinants of DI between these two sources. Local GDP significantly affects the inflows of both types of investments, but U.S. investment is more sensitive to local demand. The lagged wage variable negatively affects both Hong Kong and U.S. investment, but Hong Kong investment is more sensitive to local labor cost. A rise in regional labor quality raises both investment inflows, but the quality index exerts a stronger influence on U.S. investment. These econometric estimates can be understood in light of two stylized facts of U.S. and Hong Kong investments in China. First, the motive of U.S. firms investing in China is primarily to sell in China, whereas Hong Kong firms tend to invest in China to take advantage of the low labor costs and then to export. Second, U.S. investments in China tend to be more capital-and skilled-intensive than those from Hong Kong.

Research paper thumbnail of The Effects and Implications of Foreign Direct Investment in China for Other Developing Economies: Hollowing Out or Filling in?

China into the Hu-Wen Era, 2006

Research paper thumbnail of The Political Economy of the Japanese Yen and the U.S.-Japan Trade Conflict

SSRN Electronic Journal, 2003

In this paper, we use a version of the Dixit-Grossman-Helpman (1997) common agency model and appl... more In this paper, we use a version of the Dixit-Grossman-Helpman (1997) common agency model and apply the lobbying framework to exchange rate policies. In particular, we formalize Ron McKinnon's idea that the appreciation of the Japanese yen in the past was due to trade pressure applied by the U.S. government. We extend the theory to examine the case where the Japanese firms are modeled as a coalition of shareholders and incumbent employees (Aoki 1988). We conclude by pointing out that this approach is applicable and relevant to the current disputes on the level of the Yuan exchange rate between the U.S. policymakers and the Chinese government.

Research paper thumbnail of FDI Flows to Latin America, East and Southeast Asia, and China: Substitutes or Complements?

Review of Development Economics, 2010

Is China diverting foreign direct investment (FDI) from other developing countries? Theoretically... more Is China diverting foreign direct investment (FDI) from other developing countries? Theoretically, a growing China augments other countries' FDI by creating more production networking and raising demand for resources. However, low Chinese costs lure multinationals away from other production sites. Here we explore this issue empirically. We focus on East and Southeast Asia and Latin America for 1985–2002. We control for the standard determinants of inward FDI, then add China FDI to represent the “China Effect.” We found that China's FDI is positively related to FDI in Asia, while the China Effect is insignificant for Latin America. Also the China Effect is generally not the most important determinant of other countries' FDI. Market sizes and policies such as corporate tax rates and openness tend to be more important.

Research paper thumbnail of Japanese and US Trade with China: A Comparative Analysis

Review of Development Economics, 1998

The paper provides a simple comparative analysis of Japanese and US trade with China. In recent y... more The paper provides a simple comparative analysis of Japanese and US trade with China. In recent years, Japanese exports to China had been growing faster than US exports, but Japanese imports from China had been growing more slowly. A large amount of US and Japanese exports were first shipped to Hong Kong, and then re‐exported to China. In 1994, Japan's largest export item to China was general machinery, while US largest export item to China was transportation equipment. According to the rivalry index constructed in the paper, competition in 1994 between US and Japanese firms was most intense in the chemical goods sector.

Research paper thumbnail of French, German, and Japanese FDI on Intra-East Asian Trade

Journal of Economic Integration, 2013

Research paper thumbnail of Determinants of U.S. and Japanese Direct Investment in China

Journal of Comparative Economics, 2002

This paper examines the determinants of FDI from U.S. and Japan in China using the provincial dat... more This paper examines the determinants of FDI from U.S. and Japan in China using the provincial data set from 1991 to 1997. The results of the regression analyses are further compared to those of the aggregated FDI without U.S. and Japan as a benchmark case. The study found various similarities and differences in the importance and the magnitudes of the determinants of FDI among three FDI sources. It is shown that both level of GDP and the lagged GDP significantly affects inflow of FDI from all sources. The hypothesis that the good quality of infrastructure is conductive to attract FDI is strongly supported for all FDI sources, although the magnitude of the impact of the variable varies. The policy variables are also found to have significant positive effects on FDI. The labor quality exerts larger influence on Japanese FDI than on U.S. FDI, which may reflect the different structure for coordinating activities between U.S. and Japanese firms. The results for the wage variables are inconclusive. The study also shows the marginal support for the positive effect of cultural proximity between Japanese FDI and the provinces of Manchuria.