Do Overseas investments create or replace trade? New insights from a macro-sectoral study on Japan
type: Distribution
access URL: https://hal.science/hal-00854109
format: HTML
issued: 2026-05-10T00:40:41.736122
modified: 2026-05-10T00:40:41.717771

Do Overseas investments create or replace trade? New insights from a macro-sectoral study on Japan
type: Dataset
contact point: Organization
  fn: CCSD
keyword: jel-f---international-economicsff2---international-factor-movements-and-international-businessf
keyword: shsecohumanities-and-social-scienceseconomics-and-finance
keyword: infoeu-reposemanticspreprint
keyword: imports
keyword: jel-f---international-economicsff1---tradeff1f14---empirical-studies-of-trade
keyword: exports
keyword: jel-c---mathematical-and-quantitative-methodscc2---single-equation-models--single-variablescc2
keyword: preprints-working-papers-
keyword: poisson-pseudo-maximum-likelihood-ppml
keyword: outward-foreign-direct-investment-fdi
landing page: https://hal.science/hal-00854109
description: This paper investigates the relationship between outward foreign direct investment (FDI) and both exports and imports from Japan. Using the Poisson pseudomaximum likelihood (PPML) estimator developed by Santos Silva and Tenreyro (2006) to deal with the problem of zero trade ﬂows when estimating a gravity equation, we show that the complementary relationship between FDI and exports is overestimated when using the Ordinary Least Square (OLS) estimator. The PPML method also allows sectoral estimation of the relationship. We ﬁnd that whether outward FDI creates or replaces trade depends on the industry under scrutiny. Our results indicate that the complementary relationship between FDI and trade is dominant in the Japanese manufacturing sector, especially in electric machinery, transportation equipement and precision machinery. We ﬁnd also that Japanese overseas investments substitute for exports in chemicals products and for both exports and imports in general machinery.
issued: 2026-05-10T00:40:41.727473
language: en
modified: 2026-05-10T00:40:41.727478

test_moissonnage_selune
type: Agent