Globalization of Japanese firms: Long-run Trends, Cross-sectional Variations, and Policy Implications

Japanese firms are increasingly involved in various global business operations - not only in traditional international trade in goods, but also in offshore production and the new mode of globalization: offshore outsourcing.
While it had been persistently low, the share of international trade in the Japanese national economy began to rise at the start of the 21st century. Cross-border relocations of production are likely to be at least partly related to shrinking trade surplus.
Japanese manufacturing firms produce more and more of their outputs abroad. The production networks of Japanese multinational firms are deeply integrated with intra-region international trade in East Asia.
Cross-border outsourcing between firms without ownership relations is of increasing importance in international trade, though only a limited number of productive large firms are actively offshoring. The range of offshorable tasks has been expanded from production of intermediates to wider varieties of service functions through the development of information technologies, but our firm-level analyses suggest that complex tasks such as R&D remain largely outsourced within the same country. The role of innovation in Japanese competitiveness should be emphasized in this context.
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Globalization of Japanese firms: Long-run Trends, Cross-sectional Variations, and Policy Implications
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