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Where at home do exporters produce and export?

Where at home do exporters produce and export? Foreign growth can induce changes in production structures across domestic regions through international trade. With a two‐country model with the explicit incorporation of two regions in the home country, we show that effects of foreign growth on exports and production to be possibly asymmetric among home regions. This foreign‐growth effect is especially prominent in Asia with China emerging as the largest trading country. We empirically test our theoretical hypothesis with the data set of Japanese regions. We find evidence that the growth of Asian countries leads to a change in the regional structure of exports and production in Japan. With respect to an adjacent Asian country, the growth of a foreign country exerts opposite effects on production among Japanese regions. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png The World Economy Wiley

Where at home do exporters produce and export?

Hirose, Kyoko; Yoshida, Yushi
The World Economy , Volume 41 (6) – Jan 1, 2018
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44 pages

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Publisher
Wiley
Copyright
Copyright © 2018 John Wiley & Sons Ltd
ISSN
0378-5920
eISSN
1467-9701
DOI
10.1111/twec.12588
Publisher site
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Abstract

Foreign growth can induce changes in production structures across domestic regions through international trade. With a two‐country model with the explicit incorporation of two regions in the home country, we show that effects of foreign growth on exports and production to be possibly asymmetric among home regions. This foreign‐growth effect is especially prominent in Asia with China emerging as the largest trading country. We empirically test our theoretical hypothesis with the data set of Japanese regions. We find evidence that the growth of Asian countries leads to a change in the regional structure of exports and production in Japan. With respect to an adjacent Asian country, the growth of a foreign country exerts opposite effects on production among Japanese regions.

Journal

The World Economy – Wiley

Published: Jan 1, 2018

Keywords: ; ; ;

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