The determinants of offshore production by Multinational Corporations (MNCs) : a comparison of Japanese and US MNCs

This study employs confidential affiliate-level panel data to improve measures of foreignaffiliate activities of Japanese firms in manufacturing sectors. Combining existing data onU.S. MNCs with the Japanese data, we illustrate the pattern and determinant of their foreignaffiliate sales by destination market across countries and industries for the period 1989-2005.Among our results, Japanese and U.S. MNCs are similar in the substantial growth of theirforeign affiliate sales and the importance of sales to local markets. However, Japanese MNCsare distinctive from U.S. MNCs in that Japanese affiliate sales in Asia were prominentlyhigher in host markets with lower educational attainment