Chapter 8 Location Choice of Japanese Multinationals: Country Characteristics or Region Characteristics?

In the present global era in which firms choose the location of their plants beyond national borders, location characteristics are important for attracting multinational enterprises (MNEs). The better access to countries with large market is clearly attractive for MNEs. For example, special treatments on tariffs such as the Generalized System of Preferences (GSP) are beneficial for MNEs whose home country does not have such treatments. Not only such country characteristics but also region characteristics (i.e. province-level or city-level ones) matter, particularly in the case that location characteristics differ widely between a nation's regions. The existence of industrial concentration, that is, agglomeration, is a typical regional characteristic. It is with consideration of these country-level and region-level characteristics that MNEs decide their location abroad. A large number of academic studies have investigated in what kinds of countries MNEs locate, i.e. location choice analysis. Employing the usual new economic geography model (i.e. constant elasticity of substitution (CES) utility function, Dixit-Stiglitz monopolistic competition, and ice-berg trade costs), the literature derives the profit function, of which coefficients are estimated using maximum likelihood procedures. Recent studies are as follows: Head, Rise, and Swenson (1999) for Japanese MNEs in the US; Belderbos and Carree (2002) for Japanese MNEs in China; Head and Mayer (2004) for Japanese MNEs in Europe; Disdier and Mayer (2004) for French MNEs in Europe; Castellani and Zanfei (2004) for large MNEs worldwide; Mayer, Mejean, and Nefussi (2007) for French MNEs worldwide; Crozet, Mayer, and Mucchielli (2004) for MNEs in France; and Basile, Castellani, and Zanfei (2008) for MNEs in Europe. At the present time, three main topics can be found in this literature. The first introduces various location elements as independent variables. The above-mentioned new economic geography model usually yields the profit function, which is a function of market size, productive factor prices, price of intermediate goods, and trade costs. As a proxy for the price of intermediate goods, the measure of agglomeration is often used, particularly the number of manufacturing firms. Some studies employ more disaggregated numbers of manufacturing firms, such as the number of manufacturing firms with the same nationality as the firms choosing the location (e.g., Head et al., 1999; Crozet et al., 2004) or the number of firms belonging to the same firm group (e.g., Belderbos and Carree, 2002). As part of trade costs, some investment climate measures have been examined: free trade zones in the US (Head et al., 1999), special economic zones and opening coastal cities in China (Belderbos and Carree, 2002), and Objective 1 structural funds and cohesion funds in Europe (Basile et al., 2008). Second, the validity of proxy variables for location elements is further examined. Head and Mayer (2004) examine the validity of market potential on location choice. They propose the use of two measures: the Harris market potential index (Harris, 1954) and the Krugman-type index used in Redding and Venables (2004). The Harris-type index is simply the sum of distance-weighted real GDP. They employ the Krugman-type market potential index, which is directly derived from the new economic geography model, as it takes into account the extent of competition (i.e. price index) and is constructed using estimators of importing country dummy variables in the well-known gravity equation, as in Redding and Venables (2004). They find that "theory does not pay", in the sense that the Harris market potential outperforms Krugman's market potential in both the magnitude of its coefficient and the fit of the model to be estimated. The third topic explores the substitution of location by examining inclusive values in the nested-logit model. For example, using firm-level data on French investments both in France and abroad over the 1992-2002 period, Mayer et al. (2007) investigate the determinants of location choice and assess empirically whether the domestic economy has been losing attractiveness over the recent period or not. The estimated coefficient for inclusive value is strongly significant and near unity, indicating that the national economy is not different from the rest of the world in terms of substitution patterns. Similarly, Disdier and Mayer (2004) investigate whether French MNEs consider Western and Eastern Europe as two distinct groups of potential host countries by examining the coefficient for the inclusive value in nested-logit estimation. They confirm the relevance of an East-West structure in the country location decision and furthermore show that this relevance decreases over time. The purpose of this paper is to investigate the location choice of Japanese MNEs in Thailand, Cambodia, Laos, Myanmar, and Vietnam, and is closely related to the third topic mentioned above. By examining region-level location choice with the nested-logit model, I investigate the relative importance of not only country characteristics but also region characteristics. Such investigation is invaluable particularly in the case of location choice in those five countries: industrialization remains immature in those countries which have not yet succeeded in attracting enough MNEs, and as a result, it is expected that there are not yet crucial regional variations for MNEs within such a nation, meaning the country characteristics are still relatively important to attract MNEs. To illustrate, in the case of Cambodia and Laos, one of the crucial elements for Japanese MNEs would be that LDC preferential tariff schemes are available for exports from Cambodia and Laos. On the other hand, in the case of Thailand and Vietnam, which have accepted a relatively large number of MNEs and thus raised the extent of regional inequality, regional characteristics such as the existence of agglomeration would become important elements in location choice. Our sample countries seem, therefore, to offer rich variations for analyzing the relative importance between country characteristics and region characteristics. Our empirical strategy has a further advantage. As in the third topic in the location choice literature, the use of the nested-logit model enables us to examine substitution patterns between country-based and region-based location decisions by MNEs in the concerned countries. For example, it is possible to investigate empirically whether Japanese multinational firms consider Thailand/Vietnam and the other three countries as two distinct groups of potential host countries, by examining the inclusive value parameters in nested-logit estimation. In particular, our sample countries all experienced dramatic changes in, for example, economic growth or trade costs reduction during the sample period. Thus, we will find the dramatic dynamics of such substitution patterns. Our rigorous analysis of the relative importance between country characteristics and region characteristics is invaluable from the viewpoint of policy implications. First, while the former characteristics should be improved mainly by central government in each country, there is sometimes room for the improvement of the latter characteristics by even local governments or smaller institutions such as private agencies. Consequently, it becomes important for these smaller institutions to know just how crucial the improvement of region characteristics is for attracting foreign companies. Second, as economies grow, country characteristics become similar among countries. For example, the LCD preferential tariff schemes are available only when a country is less developed. Therefore, it is important particularly for the least developed countries to know what kinds of regional characteristics become important following economic growth; in other words, after their country characteristics become similar to those of the more developed countries. I also incorporate one important characteristic of MNEs, namely, productivity. The well-known Helpman-Melitz-Yeaple model indicates that only firms with higher productivity can afford overseas entry (Helpman et al., 2004). Beyond this argument, there may be some differences in MNEs' productivity among our sample countries and regions. Such differences are important from the viewpoint of "spillover effects" from MNEs, which are one of the most important results for host countries in accepting their entry. The spillover effects are that the presence of inward foreign direct investment (FDI) aises domestic firms' productivity through various channels such as imitation. Such positive effects might be larger in areas with more productive MNEs. Therefore, it becomes important for host countries to know how much productive firms are likely to invest in them. The rest of this paper is organized as follows. Section 2 takes a brief look at the worldwide distribution of Japanese overseas affiliates. Section 3 provides an empirical model to examine their location choice, and lastly, we discuss future works to estimate our model.

Origin and patterns of distribution of trace elements in street dust. Unleaded petrol and urban lead

The elemental composition, patterns of distribution and possible sources of street dust are not common to all urban environments, but vary according to the peculiarities of each city. The common features and dissimilarities in the origin and nature of street dust were investigated through a series of studies in two widely different cities, Madrid (Spain) and Oslo (Norway), between 1990 and 1994. The most comprehensive sampling campaign was carried out in the Norwegian capital during the summer of 1994. An area of 14 km2, covering most of downtown Oslo and some residential districts to the north of the city, was divided into 1 km2 mapping units, and 16 sampling increments of approximately 150 g were collected from streets and roads in each of them. The fraction below 100 μm was acid-digested and analysed by ICP-MS. Statistical analyses of the results suggest that chemical elements in street dust can be classified into three groups: “urban” elements (Ba, Cd, Co, Cu, Mg, Pb, Sb, Ti, Zn), “natural” elements (Al, Ga, La, Mn, Na, Sr, Th, Y) and elements of a mixed origin or which have undergone geochemical changes from their original sources (Ca, Cs, Fe, Mo, Ni, Rb, Sr, U). Soil resuspension and/or mobilisation appears to be the most important source of “natural” elements, while “urban” elements originate primarily from traffic and from the weathering and corrosion of building materials. The data for Pb seem to prove that the gradual shift from leaded to unleaded petrol as fuel for automobiles has resulted in an almost proportional reduction in the concentration of Pb in dust particles under 100 μm. This fact and the spatial distribution of Pb in the city strongly suggest that lead sources other than traffic (i.e. lead accumulated in urban soil over the years) may contribute as much lead, if not more, to urban street dust.

Mechanical Characterization of Tungsten-Titanium-Lanthana alloy: Influence of Temperature and Atmosphere

The target is to evaluate the mechanical behavior of Ti and La2O3 dispersed W alloy, processed by HIP and compare it with a reference pure-W. Tests were performed in both oxidant (air) and inert (vacuum) atmosphere in a temperature range from -196 to 1200 °C.

Determinants and impact of suboptimal asthma control in Europe : The INTERNATIONAL CROSS-SECTIONAL AND LONGITUDINAL ASSESSMENT ON ASTHMA CONTROL (LIAISON) study

Acknowledgements We are grateful to THERAmetrics for the study management, data collection and analysis. The authors would like to thank the following investigators for their contribution (>30 patients enrolled): F. Fohler, A.G. Haider, J. Hesse-Tonsa, J. Messner, W. Pohl (Austria); G. Joos, J.L. Halloy, R. Peche, H. Simonis, P. Van den Brande (Belgium); B. Bugnas, J.M. Chavaillon, P. Debove, S. Dury, L. Mathieu, O. Lagrange, A. Prudhomme, S. Verdier (France); A. Benedix, O. Kestermann, A. Deimling, G. Eckhardt, M. Gernhold, V. Grimm-Sachs, M. Hoefer, G. Hoheisel, C. Stolpe, C. Schilder, M. John, J. Uerscheln, K.H. Zeisler (Germany); A. Chaniotou, P. Demertzis, V. Filaditaki-Loverdou, A. Gaga, E. Georgatou-Papageorgiou, S. Michailidis, G. Pavkalou, M. Toumpis (Greece); K. Csicsari, K. Hajdu, M. Póczi, M. Kukuly, T. Kecskes, C. Hangonyi, J. Schlezak, E. Takács, M. Szabo,G. Szabó, C. Szabo (Hungary); G.W. Canonica, W. Castellani, A. Cirillo, M.P. Foschino Barbaro, M. Gjomarkaj, G. Guerra, G. Idotta, D. Legnani, M. Lo Schiavo, R. Maselli, F. Mazza, S. Nutini, P. Paggiaro, A. Pietra, O. Resta, S. Salis, N.A. Scichilone, M.C. Zappa, A. Zedda (Italy); M. Goosens, R. Heller, K. Mansour, C. Meek, J. van den Berg (The Netherlands); A. Antczak, M. Faber, D. Madra-Rogacka, G. Mincewicz, M. Michnar, D. Olejniczak, G. Pulka, Z. Sankowski, K. Kowal, I. Krupa-Borek, B. Kubicka Kozik, K. Kuczynska, P. Kuna, A. Kwasniewski, M. Wozniak (Poland); F. Casas Maldonado, C. Cisneros, J. de Miguel Díez, L.M. Entrenas Costa, B. Garcìa-Cosio, M.V. Gonzales, L. Lores, M. Luengo, C. Martinez, C. Melero, I. Mir, X. Munoz, A. Pacheco, V. Plaza, J. Serra, J. Serrano, J.G. Soto Campos (Spain); T. Bekci, R. Demir, N. Dursunoglu, D. Ediger, A. Ekici, O. Goksel, H. Gunen, I.K. Oguzulgen, Z.F. Ozseker, (Turkey); L. Barnes, T. Hall, S. Montgomerie, J. Purohit, J. Ryan (United Kingdom). The authors would also like to thank P. Galletti (THERAMetrics S.p.A., Sesto San Giovanni, Italy) and K. Stockmeyer (THERAMetrics GmbH, Essen, Germany) for providing editorial assistance in the preparation of this manuscript. Open Access This article is distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license, and indicate if changes were made. The Creative Commons Public Domain Dedication waiver (http://creativecommons.org/publicdomain/zero/1.0/) applies to the data made available in this article, unless otherwise stated.

PCR-based subtractive hybridization and differences in gene content among strains of Helicobacter pylori

Genes that are characteristic of only certain strains of a bacterial species can be of great biologic interest. Here we describe a PCR-based subtractive hybridization method for efficiently detecting such DNAs and apply it to the gastric pathogen Helicobacter pylori. Eighteen DNAs specific to a monkey-colonizing strain (J166) were obtained by subtractive hybridization against an unrelated strain whose genome has been fully sequenced (26695). Seven J166-specific clones had no DNA sequence match to the 26695 genome, and 11 other clones were mixed, with adjacent patches that did and did not match any sequences in 26695. At the protein level, seven clones had homology to putative DNA restriction-modification enzymes, and two had homology to putative metabolic enzymes. Nine others had no database match with proteins of assigned function. PCR tests of 13 unrelated H. pylori strains by using primers specific for 12 subtracted clones and complementary Southern blot hybridizations indicated that these DNAs are highly polymorphic in the H. pylori population, with each strain yielding a different pattern of gene-specific PCR amplification. The search for polymorphic DNAs, as described here, should help identify previously unknown virulence genes in pathogens and provide new insights into microbial genetic diversity and evolution.

Absence of a barrier to backwards rotation of the bacterial flagellar motor demonstrated with optical tweezers

A cell of the bacterium Escherichia coli was tethered covalently to a glass coverslip by a single flagellum, and its rotation was stopped by using optical tweezers. The tweezers acted directly on the cell body or indirectly, via a trapped polystyrene bead. The torque generated by the flagellar motor was determined by measuring the displacement of the laser beam on a quadrant photodiode. The coverslip was mounted on a computer-controlled piezo-electric stage that moved the tether point in a circle around the center of the trap so that the speed of rotation of the motor could be varied. The motor generated ≈4500 pN nm of torque at all angles, regardless of whether it was stalled, allowed to rotate very slowly forwards, or driven very slowly backwards. This argues against models of motor function in which rotation is tightly coupled to proton transit and back-transport of protons is severely limited.

Dynamics of Gene Expression Revealed by Comparison of Serial Analysis of Gene Expression Transcript Profiles from Yeast Grown on Two Different Carbon SourcesD⃞

We describe a genome-wide characterization of mRNA transcript levels in yeast grown on the fatty acid oleate, determined using Serial Analysis of Gene Expression (SAGE). Comparison of this SAGE library with that reported for glucose grown cells revealed the dramatic adaptive response of yeast to a change in carbon source. A major fraction (>20%) of the 15,000 mRNA molecules in a yeast cell comprised differentially expressed transcripts, which were derived from only 2% of the total number of ∼6300 yeast genes. Most of the mRNAs that were differentially expressed code for enzymes or for other proteins participating in metabolism (e.g., metabolite transporters). In oleate-grown cells, this was exemplified by the huge increase of mRNAs encoding the peroxisomal β-oxidation enzymes required for degradation of fatty acids. The data provide evidence for the existence of redox shuttles across organellar membranes that involve peroxisomal, cytoplasmic, and mitochondrial enzymes. We also analyzed the mRNA profile of a mutant strain with deletions of the PIP2 and OAF1 genes, encoding transcription factors required for induction of genes encoding peroxisomal proteins. Induction of genes under the immediate control of these factors was abolished; other genes were up-regulated, indicating an adaptive response to the changed metabolism imposed by the genetic impairment. We describe a statistical method for analysis of data obtained by SAGE.

Altering the biochemical state of individual cultured cells and organelles with ultramicroelectrodes

We describe an efficient technique for the selective chemical and biological manipulation of the contents of individual cells. This technique is based on the electric-field-induced permeabilization (electroporation) in biological membranes using a low-voltage pulse generator and microelectrodes. A spatially highly focused electric field allows introduction of polar cell-impermeant solutes such as fluorescent dyes, fluorogenic reagents, and DNA into single cells. The high spatial resolution of the technique allows for design of, for example, cellular network constructions in which cells in close contact with each other can be made to possess different biochemical, biophysical, and morphological properties. Fluorescein, and fluo-3 (a calcium-sensitive fluorophore), are electroporated into the soma of cultured single progenitor cells derived from adult rat hippocampus. Fluo-3 also is introduced into individual submicrometer diameter processes of thapsigargin-treated progenitor cells, and a plasmid vector cDNA construct (pRAY 1), expressing the green fluorescent protein, is electroporated into cultured single COS 7 cells. At high electric field strengths, observations of dye-transfer into organelles are proposed.

Branch migration during Rad51-promoted strand exchange proceeds in either direction

The Saccharomyces cerevisiae Rad51 protein is important for genetic recombination and repair of DNA double-strand breaks in vivo and can promote strand exchange between linear double-stranded DNA and circular single-stranded DNA in vitro. However, unlike Escherichia coli RecA, Rad51 requires an overhanging complementary 3′ or 5′ end to initiate strand exchange; given that fact, we previously surmised that the fully exchanged molecules resulted from branch migration in either direction depending on which type of end initiated the joint molecule. Our present experiments confirm that branch migration proceeds in either direction, the polarity depending on whether a 3′ or 5′ end initiates the joint molecules. Furthermore, heteroduplex DNA is formed rapidly, first at the overhanging end of the linear double-stranded DNA’s complementary strand and then more slowly by progressive lengthening of the heteroduplex region until strand exchange is complete. Although joint molecule formation occurs equally efficiently when initiated with a 3′ or 5′ overhanging end, branch migration proceeds more rapidly when it is initiated by an overhanging 3′ end, i.e., in the 5′ to 3′ direction with respect to the single-stranded DNA.