Published In
KSU Discussion Paper Series
Document Type
Article
Publication Date
10-1-2004
Subjects
China -- Commerce -- Japan, Japan -- Commerce -- China, International trade
Abstract
Political conflicts among trading partners have changed their forms with ever-increasing flows of foreign direct investment. A decrease in the exports of Japan might merely be a reflection of a global production shift by Japanese multinational corporations. We investigate the effect of Japanese trade on the exports of other countries to the United States in the 1990s. In our sample we include eight Asian countries besides the US and Japan. With the trade data disaggregated at the HS 4-digit level, we regress the exports of an Asian country to the US on the Japanese exports to the US and the third-country, and the Japanese FDI to a third-country in a panel data specification. Among eight countries investigated, we find the evidence that Chinese and Japanese exports are substitutes in the US market while the exports of China to the US are partly promoted by Japanese FDI to China. The estimation result confirms a view that China competes vigorously with Japan in the US market while Japanese multinationals are adjusting their production bases to China in a process of reforming a new global production network.
DOI
10.1080/13602380600601570
Persistent Identifier
http://archives.pdx.edu/ds/psu/4844
Citation Details
Ito, Hiro, and Yushi Yoshida. How do the Asian Economies Compete with Japan in the US Market, China Exceptional? A Triangular Trade Approach. No. 18. KSU Discussion Paper Series, 2004.