1、1 外文翻译 原文 EXPORTING AND FDI AS ALTERNATIVE STRATEGIES Material Source： OXFORD REVIEW OF ECONOMIC POLICY， VOL. 20， Author： Keith Head， John Ries Exports and overseas production are alternative modes for serving foreign customers. Empirical studies usually find that foreign markets are served through
2、both modes and that countries receiving high levels of exports also host large amounts of foreign direct investment (FDI). This paper evaluates several possible ways to reconcile the facts about FDI and exports with the standard theory of multinational corporations. We argue that coexistence and cor
3、relation of FDI and exports are consistent with models where the two modes are substitutes. This substitutive relationship finds collaborative evidence in the results of several papers. Nevertheless ， a significant body of evidence suggests that FDI sometimes complements exports through the mechanis
4、mof stimulating exports of intermediate goods for use by overseas affiliates. I. INTRODUCTION Multinational corporations (MNCs) recurrently face the same question： should we supply product X to customers in country j using our existing factory in country i or should we invest in a facility that can
5、manufacture locally in country j? To give concrete examples， both authors of this paper drive cars manufactured by Japanese firms. One car was produced at Subarus main plant in Gunma， Japan， while the other was produced in Georgetown， Kentucky.These examples make it clear that， at thelevel of an ind
6、ividual product， exporting and foreign direct investment (FDI) are alternative strategies for reaching an overseas customer. Much empirical work has struggled to find statistical evidence to support this proposition. This paper outlines alternative theories of the MNC to identify the economic mechan
7、isms linking FDI and exports. We then review the large literature on whether exporting and FDI are substitutes or complements. With few exceptions， most studies find a positive relationship between exports and FDI. Some authors interpret 2 this as evidence of complementarity between the two variable
8、s.Others question the econometrics， arguing that the positive relationship could be spurious. We argue that the empirical evidence does not contradict the theoretical prediction of substitution at the product level. Indeed， substitution is found in studies that focus on narrow product lines. However
9、， manufacturing a downstream product in a foreign country may induce trade in upstream products and therebylead to positively correlated FDI and exports. The empirical literature provides direct and indirect support for this form of economic complementarity between FDI and exports. Why should we car
10、e whether exports and FDI are substitutes or complements? There do not appear to be any issues where the appropriate policy choice depends directly on the answer. However， governments formulating trade and foreign investment policies should benefit from a more complete understanding of how MNCs make
11、 international production decisions and the ramifications of these decisions for their home operations (including exporting).For example， would a less favourable tax treatment for income earned by overseas affiliates stimulate the manufacturing sector at home? To the extent that FDI and exports are
12、substitutes， raising the tax cost of FDI might induce more production at home. If， instead， overseas activity tends to complement home activity， it may not actually be in domestic workers interests to discourage overseas investment.The paper proceeds as follows. Section II begins with a simple expos
13、ition of the standard model of the FDI versus export decision and identifies the key factors influencing the choice. The prediction of the model that firms will reach a given foreign market either through FDI or exporting appears to be at odds with country- and firm-level evidence illustrated by fig
14、ures in section III. In the two sections that follow， we discuss extensions of the standard model of MNCs that can explain the coexistence and positive correlation of FDI and exports. In section VI， we survey the regression evidence， describing the methods used to investigate the exportFDI relations
15、hip. Section VII provides our conclusions on what lessons the theory of the MNC should draw from the empirical literature. II. SINGLE-PRODUCT MNCS AND THE CASE FOR SUBSTITUTION We begin with the simplest possible model for considering the formation of an MNC. The firm produces one product that it se
16、lls to consumers in both the home country (home， H) and the foreign country (foreign， F). Figure 1 illustrates the three options available to the firm. The default position of a firm as it first serves a foreign market is home centralization. A second option is to open a plant in the 3 foreign count
17、ry to serve that market while continuing to serve the home market with the original plant. We call this replication because it involves creating a replica of the home plant in the foreign country. The use of the replication form eliminates the exports associated with home centralization since the MN
18、C now serves each market locally. A third option is to shut down the home plant and use a new factory in the foreign country to manufacture for both markets. This foreign centralization form involves importing back into the home market.Presumably some head-office activities (control) remain at home
19、or else we would just see this as home centralization from the perspective of the foreign country. We will explicitly consider a twostage MNC later， but for now we want to retain the focus on a single business unit. We can use a little bit of algebra to make our analysis more precise. We take the si
20、ze of each market for the firms product as given， with there being MH customers at home and MF customers in the foreign country. We specify the level of demand in each country exogenously to avoid having to consider pricing decisions. The underlying assumptions would be that each consumer has demand
21、 for one unit for a price less than or equal to his or her valuation and zero units for any price above it. Therefore the firm charges a price equal to each consumers willingness to pay. This means that aggregate revenues do not depend on the strategy the firm selects and we can focus on identifying
22、 the cost-minimizing strategy.This approach is fine for outlining the basic case for substitution. However， when we consider the case for complementarity， it will prove important to allow for downward-sloping demand curves. Figure 1 Three Strategies for a Single-product Firm 4 We assume that there i
23、s a composite variable factor that we will refer to as labour and denote the composite variable factor prices as wages WH at home and WF abroad. The individual firm possesses a unique technology allowing it transform variable inputs into final goods with productivity A that does not depend on the co
24、untry in which it produces. The total cost of home centralization， CH， is given as CH = (wH /A) MH + (wH /A+TF ) MF +K (1) Where wH /A is the marginal cost of home production， TF represents the trade costs incurred in exporting to the foreign market， MF is the size of the foreign market， and K repre
25、sents the fixed costs of the capital (land， buildings， equipment) deployed at the home factory. For simplicity， assume that this cost does not depend on which country a factory is built in. If the firm were to open another plant， it would have to incur the capital costs twice. However， it would be a
26、ble to avoid trade costs by serving markets locally. Thus， the costs of replication are given by CR = (wH /A) MH + (wF /A) MF +2K. (2) Shutting down the home plant and relocating it to the foreign country can lower fixed costs back to K， assuming that all the home investment K is reversible (i.e. th
27、at it can be sold at full value or relocated at zero cost). Under foreign centralization， trade becomes necessary again. The costs of importing foreign-made products into home， are denoted as TH. Therefore the costs of foreign centralization are given by CF = (wF /A) MF + (wF /A+ TH) MH +K. (3) Mult
28、inational business strategy in this example just requires us to compare CH， CR， and CF and select the form that yields the lowest cost.Three-way comparisons can be complicated， so we will set aside foreign centralization and consider the relative merits of home centralization (exporting) versus repl
29、ication. Home centralization is preferred when CR CH = K+( wF /A) MF ( wH /A+ TF) MF 0.(4) Note that the costs of producing for the home market have cancelled each other out since both forms involve using the home factory for that market.Dividing by the size of the foreign market， MF， we can see tha
30、t exporting is preferable to replication when wF /A +K/ MF wH /A + TF. (5) Figure 2 graphs the left- and right-hand sides of the inequality. It shows that replicating overseas investment can only be justified when the foreign market is 5 large enough. We can solve for the critical market size requir
31、ed tojustify replicating investment. This is the MF* that sets CH = CR： MF*= K/ TF ( wF wH )/A. (6) Firms centralize production for both markets at home and export to the foreign market when MF 0). The larger the home comparative advantage， the bigger the foreign market will have to be to justify re
32、plicating investment. III. THE OBSERVED RELATIONSHIP BETWEEN FDI AND EXPORTS Straightforward intuition， supported by the algebra of section II， suggests that exports and FDI are alternative modes for serving foreign markets.Changes in trade costs， market sizes， relative production costs， or the impo
33、rtance of scale economies can shift relative benefits in one direction or the other， causing the firm to switch from one mode to the other. It is natural (but incorrect) to suppose that this theoretical argument implies that one should seea negative relationship between FDI and exports in the data.
34、We shall see that this is rarely the case. In this section we use three figures to look directly at the relationship between the variables of interest. What kinds of data could be used to investigate therelationship between exports and FDI? The most obvious sort are data on a cross-section of potent
35、ial host countries. Consider a given source country. Its firms could choose to serve some of these foreign markets via exporting (the nearby， small markets with low tariffs) and some via FDI (the distant， large markets with high tariffs). What should we expecta graph of export levels versus FDI leve
36、ls to look like? Taking the section II theory seriously， we would expect all the data to lie on the horizontal axis (all firms choose FDI) or the vertical axis (all firms choose exporting). The correlation between FDI and exports would necessarily be negative. Figure 3 illustrates the actual relatio
37、nship betweencross-national variation in FDI and exports using data from the Appendix of Brainard (1997). Each point in 6 Figure 3 represents a country， with twoletter International Standards Organization (ISO) codes used as labels. The measure of FDI is the sales of US-owned affiliates located in e
38、ach country.Export amounts are totals (i.e. not limited to US parents or affiliates). The striking aspects of this figure are that FDI and exports coexist (both are uniformly positive) in Brainards sample and they exhibit a pronounced positive correlation. The line through the data graphs the ordina
39、ry least squares (OLS) regression of log(exports) on log (affiliate sales). The corresponding elasticity of 0.63 is highly significant (t-statistic of 5.5). A second type of cross-section variation comes from selecting a single host country and examining how sales of foreign-owned affiliates there r
40、elate to imports from a cross-section of origin countries.Figure 4 uses data on US inward FDI， relating sales of foreign-owned affiliates in the USA to total US imports from the FDI source country. The statistical relationship is positive in this case as well， although it is intriguing to note that，
41、 with an elasticity of 0.26， it is substantially weaker. The theory of section II relates to firm-level decision making and it is， therefore， natural to examine crosssections of firms. In prior work， Head and Ries (2001， 2003) combine export information from annual reports with a published survey of
42、 Japanese overseas investment. Figure 5 graphs exports of 26 large (domestic employment over 15 ， 000) Japanese manufacturing firms versus employment at overseas manufacturing affiliates. Once again we find that FDI (here measured by affiliate employment instead o f affiliate sales) and exports coex
43、ist and exhibit a raw positive correlation.All Japanese manufacturing firms with more than 15， 000 employees in Japan conduct FDI and export. Relaxing the size cut-off to the 44 firms with 10， 000 or more domestic employees， there are just two firms with zero exports (a printing company and a baking
44、 company). Figure 2 The Critical Foreign Market Size to Justify Replicating Investment 7 Figure 3 Overseas Sales of US-owned Affiliates and Total US Exports， 1989 Source： Brainard (1997， Table A1). The best-known Japanese makers of cars and consumer electronicsToyota， Nissan， Honda， Matsushita， Sony
45、， and Toshibaall appear in the north-east section of the figure， where both overseas employment and exports are largest. 8 Theelasticity in a loglog regression is 0.45 (t-statistic of 3.4). How can we account for the finding that both FDI and exports are positive across the board and highly correlat
46、ed with each other? One possibility is that the basic theory is wrong in an important way： overseas production actually complements exports instead of displacing them. We consider this Figure 4 US Sales of Foreign-owned Affiliates and Total US Imports， 1989 Source： Brainard (1997， Table A1). Figure
47、5 Japanese Firm-level Overseas Employment and Exports， 1989 9 hypothesis later in the paper. The intuition behind a substitutive relationship is very strong and should be taken seriously. Consequently ， we next investigate explanations that can reconcile core aspects of the section II theory with th
48、e empirical facts shown in Figures 3， 4， and 5. In the next section of the paper， we extend the simple model of the export and FDI decision to explain why exports and FDI can coexist in equilibrium.The following section identifies reasons for their positive correlation. IV. EXPLAINING THE COEXISTENC
49、E OF FDI AND EXPORTS The theory outlined so far assumes that FDI and exports are substitute modes through which to reach foreign markets. Yet in the data we observe both.Below we outline three situations where exporters and investors coexist in equilibrium. The first two pertain to single-product firms. We consider representative firms first and then firms that are exogenouslyheterogeneous. The third situation ariseswhen firms produce more th
