The Internationalization of Japanese Firms: New Findings Based on Firm-Level Data

Abstract

Using firm-level data for the Japanese manufacturing sector, we examine characteristics of internationalized firms, i.e., firms engaging in export and/or foreign direct investment (FDI), and compare these characteristics with those for selected European countries. We find that internationalized firms are a few and that their productivity is higher than that of non-internationalized firms, confirming the findings of existing studies on Japan and other countries. In addition, we find that productivity differences between non- internationalized firms, exporters, and FDI firms are substantially smaller in Japan than in the European countries. This evidence suggests that productivity differences alone cannot determine export or FDI behavior of Japanese firms.