Kazunobu Hayakawa

Institute of Developing Economies - Japan External Trade Organization, Tiba, Chiba, Japan

Are you Kazunobu Hayakawa?

Claim your profile

Publications (59)17.24 Total impact

  • Kazunobu Hayakawa · Tadashi Ito · Fukunari Kimura
    [Show abstract] [Hide abstract]
    ABSTRACT: This study uses the most disaggregated tariff line-level trade data in a large number of countries in the world to empirically decompose the trade creation effects of regional trade agreements (RTAs) into those owing to tariff reduction and those owing to non-tariff barrier (NTB) removal. Specifically, utilizing our detailed dataset, we employ the standard gravity equation and identify those effects by estimating the trade creation effects of RTAs for ineligible and eligible products for RTA preferential schemes separately. Our major findings are as follows. First, for the whole sample, there are significantly positive trade creation effects owing to tariff reduction while the effects for NTB removal are weak. Second, the trade creation effects of tariff reduction and NTB removal are substantially large in the case of trade among low-income countries but weak among high-income countries.
    No preview · Article · Feb 2016 · Review of Development Economics
  • Kazunobu Hayakawa · Toshiyuki Matsuura · Fumihiro Okubo
    [Show abstract] [Hide abstract]
    ABSTRACT: This paper explores the firm-level impact of the 2011 flooding in Thailand, specifically, the impact on procurement patterns at Japanese affiliates in Thailand. We find that, first, small firms are more likely to lower their local procurement share, especially their share of procurement from other Japanese-owned firms in Thailand. Second, young firms are more likely to increase their share of imports from Japan, whereas old firms are more likely to look to China. Third, there is no impact on imports from ASEAN and other countries. These findings are useful for uncovering how multinationals adjust their production networks before and after natural disasters.
    No preview · Article · Dec 2015 · Journal of the Japanese and International Economies
  • Kazunobu Hayakawa · Nuttawut Laksanapanyakul
    [Show abstract] [Hide abstract]
    ABSTRACT: This study empirically examines the impacts of sharing rules of origin (RoOs) with other ASEAN + 1 free trade agreements (FTAs) on ASEAN–Korea FTA/ASEAN–China FTA utilization in Thai exports in 2011. Our detailed empirical analysis suggests that the harmonization of RoOs across FTAs plays some role in terms of reducing the costs yielded through the spaghetti bowl phenomenon. In particular, the harmonization to “change-in-tariff classification (CTC) or regional value content (RVC)” will play a relatively positive role in not seriously discouraging firms’ use of multiple FTA schemes. In contrast, harmonization to “CTC” or “CTC and RVC” hinders firms from using those schemes.
    No preview · Article · Sep 2015 · International Economics and Economic Policy
  • Kazunobu Hayakawa
    [Show abstract] [Hide abstract]
    ABSTRACT: The international export and investment activities of firms have been widely studied by scholars. In particular, prior studies have focused on two main hypotheses about firms engaged in international activities such as exporting and investing abroad; namely, self-selection of more productive firms into international activities and learning-by-doing international activities. This paper is the first study that explores these hypotheses in regard to firms’ use of free trade agreements (FTAs). We first estimate the propensity score for firms’ use of FTA schemes, and find that larger firms are more likely to participate. Then, by conducting matching analysis using the propensity scores, we find that, at least in the short run, the use of FTAs does not change bilateral exports, bilateral imports and employment but does raise the share of local inputs.
    No preview · Article · Jan 2015
  • Source
    Kuo-I Chang · Kazunobu Hayakawa
    [Show abstract] [Hide abstract]
    ABSTRACT: We conducted an empirical investigation into the determinants of Free Trade Agreement utilization in exports from Taiwan to China. First, we estimated the selection equation to see what kinds of products are included in the early harvest list. As a result, we found that Taiwan includes products with a medium magnitude of benefits from tariff removal in the early harvest list. We then estimated the equation for the determinants of Free Trade Agreement utilization by introducing an inverse of the Mills ratio estimated in the selection equation. As expected, the findings show that the Free Trade Agreement rates are more likely to be utilized for products with a larger tariff margin. In addition, some rules of origin are found to be relatively restrictive. © 2014, Center for Economic Integration, Sejong Institution, Sejong University, All Rights Reserved.
    Preview · Article · Dec 2014 · Journal of Economic Integration
  • Kazunobu Hayakawa · Fukunari Kimura
    [Show abstract] [Hide abstract]
    ABSTRACT: This paper empirically investigates how far free trade agreements (FTAs) successfully lower tariff rates and non-tariff barriers (NTBs) for manufacturing industries by employing the bilateral tariff and NTB data in time series for countries in the world. We find that FTAs under GATT Article XXIV and the Enabling Clause are associated with the 2.0 and 1.5 % lower tariff rates, respectively. In the case of NTBs, on the other hand, their respective effects are 2.1 and 2.4 %. Also, compared with these effects of FTAs, WTO membership does not have large effects on tariff rates but does have them on NTBs. These results provide important implication for the literature on the numerical assessment of FTAs.
    No preview · Article · Oct 2014 · Open Economies Review
  • Source
    Kazunobu Hayakawa · Hyun-Hoon Lee · Donghyun Park
    [Show abstract] [Hide abstract]
    ABSTRACT: In this paper, we examine the role of export promotion agencies (EPAs) in promoting exports from Japan and Korea. Looking at two home countries enables us to tackle endogeneity issues by controlling for both country-pair time-invariant characteristics and importing country time-varying characteristics. Our empirical results indicate that the coefficients of the EPA dummy are similar in size to those of the FTA dummy. This implies that establishing an EPA office in a country is equivalent to signing an FTA with that country. In addition, we find that EPA’s effects are larger for manufactured products than non-manufactured products. Finally, the EPA effect is larger for low income trade partners than for high income trade partners.
    Full-text · Article · Sep 2014 · The Developing Economies
  • Source
    Kazunobu Hayakawa · Kenmei Tsubota
    [Show abstract] [Hide abstract]
    ABSTRACT: Unlike most existing studies, this paper examines the location choices of MNEs in developing countries. Specifically, we investigate the location choices of Japanese MNEs among East Asian developing countries by estimating a four-stage nested logit model at the province level. Noteworthy results of location elements are as follows. As is consistent with the mechanics of cheap labor-seeking FDI, Japanese MNEs are more likely to invest in locations with low income and low tariff rates on products from Japan. Also, accessibility to other locations and/or ports matters in attracting Japanese MNEs because it is crucial in importing materials and exporting their products. In addition, WTO membership and bilateral investment treaties are important because these contribute to the settlement of trade and investment disputes, which is more likely to be necessary in developing countries.
    Full-text · Article · Aug 2014 · Journal of Asian Economics
  • Kazunobu Hayakawa · Hyun‐Hoon Lee · Donghyun Park
    [Show abstract] [Hide abstract]
    ABSTRACT: In this paper we examine the role of investment promotion agencies (IPA) in promoting outward foreign direct investment (FDI) from Japan and Korea. Looking at two home countries enables us to control for both country-pair time-invariant characteristics and host-country time-varying characteristics. Our empirical results suggest that home-country IPA tend to be more effective in promoting outward FDI in politically risky host countries. However, this finding depends on whether the home-country firm is listed or unlisted. More specifically, we find that the positive effect of home-country IPA on outward FDI in politically risky countries is limited to unlisted home-country firms, which tend to be less productive.
    No preview · Article · Jun 2014 · Asian Economic Journal
  • Kazunobu Hayakawa
    [Show abstract] [Hide abstract]
    ABSTRACT: In this paper, we empirically investigate the effect of diagonal cumulation on free trade agreement (FTA) utilization by exploring Thai exports to Japan under two kinds of FTA schemes. While the one scheme adopts bilateral cumulation, the other scheme does diagonal cumulation. Comparing trade under these two kinds of FTAs, we can examine the effect of diagonal cumulation without relying on not only the variation in cumulation rules across country pairs but also the variation across years. In short, our estimates do not suffer from biases from time-variant elements and country pair-specific elements. As a result, our estimates show around 4% trade creation effect of diagonal cumulation, which is much smaller than the estimates in the previous studies (around 15%).
    No preview · Article · Jun 2014 · Journal of the Japanese and International Economies
  • Kazunobu Hayakawa
    [Show abstract] [Hide abstract]
    ABSTRACT: In this paper, we empirically compare the role of firm size when exporting with that when using free trade agreement (FTA) schemes. We employ a unique survey providing detailed information on FTA use by Japanese affiliates in ASEAN, India, and Oceania. Our findings from the analysis on Japanese affiliates in ASEAN are as follows. First, firm size matters in both decisions on exporting and on using FTA schemes. In particular, firm size is more quantitatively important in decisions on FTA use than on exporting. Second, firms with experience in utilizing FTAs for exporting have an approximately 40% higher probability of using an FTA for exporting to a new country. Third, larger-sized firms use a larger number of FTA schemes.
    No preview · Article · May 2014 · Journal of International Trade and Economic Development
  • Source
    Kazunobu Hayakawa · Fukunari Kimura · Kaoru Nabeshima
    [Show abstract] [Hide abstract]
    ABSTRACT: The scope of recent regional trade agreements (RTAs) is becoming much wider in terms of including several provisions such as competition policy or intellectual property. This paper empirically examines how far advanced, non-conventional provisions in RTAs increase trade values among RTA member countries, by estimating the gravity equation with more disaggregated indicators for RTAs. As a result, we find that the provision on competition policy has the largest impacts on trade values, following that on government procurement. Our further analysis reveals that the more significant roles of these two provisions can be also observed in the impacts on the intensive and extensive margins.
    Preview · Article · May 2014 · Journal of Applied Economics
  • Chih‐Hai Yang · Kazunobu Hayakawa
    [Show abstract] [Hide abstract]
    ABSTRACT: This study investigates the determinants of overseas research and development (R&D) and the influences of various aspects of localization on affiliates' R&D intensity. Using a dataset of Taiwanese multinational enterprises (MNEs) in China, the empirical estimations find that MNEs with a larger firm size, more R&D expenditure, and a higher outward foreign direct investments intensity tend to undertake R&D. Host regions' characteristics, particularly market size and R&D resources, do matter for attracting MNEs to conduct R&D locally. Crucially, affiliates' R&D intensity is related to the degree of localization. The degree of market localization and localization of the R&D network has a positive association with affiliates' R&D intensity. From the perspective of R&D policy, a country with healthy R&D infrastructures helps attract the establishment of R&D labs of MNEs.
    No preview · Article · May 2014 · R& D Management
  • K. Hayakawa · T. Matsuura
    [Show abstract] [Hide abstract]
    ABSTRACT: This article clarifies the reasons for the recent rapid growth of foreign direct investment (FDI) in developing countries, particularly Asian countries. For this purpose, we theoretically and empirically examine the mechanics of both horizontal FDI and vertical FDI (VFDI) to shed light on the role of trade costs. Our empirical analysis using a logit or multinomial logit model of Japanese firms’ FDI choices reveals that the tariff reduction in Asian countries has lowered the productivity cutoff for VFDI. This result indicates that since developing countries, particularly Asian countries, have experienced a relatively rapid decrease in tariff rates, the increase in VFDI through tariff reduction led to the recent surge of FDI in developing countries.
    No preview · Article · Mar 2014 · Oxford Economic Papers
  • Source
    [Show abstract] [Hide abstract]
    ABSTRACT: This paper empirically investigates two areas of changes in firm behavior and performance at home before and after investing abroad. The first is the type of foreign direct investment (FDI): horizontal FDI or vertical FDI. The second is the firm's domestic activities of interest: production activity and non-production activity. From a theoretical standpoint, the impact of outward FDIs differs not only by type, but according to the firmfs activities. By exploiting two types of firm-level data that enable us to distinguish between production and non-production activities, our work provides a detailed picture of the intra-firm changes in behavior and performance that occur as a result of globalizing production.
    Preview · Article · Aug 2013 · Japan and the World Economy
  • Source
    [Show abstract] [Hide abstract]
    ABSTRACT: This paper simulates the reduction of several components in trade cost for Asia. Our sim-ulation model based on the NEG includes seven sectors, including manufacturing and non-manufacturing sectors, and 1,654 regions of 13 countries in Asia. In addition, the currently available routes of highways, railways, sea shipment, and air shipment are incorporated in our model. The course of transactions among regions is modeled as determined by firms' modal choice; firms choose the course with the lowest trade costs. The model also includes the esti-mates of some border cost measures such as tariff rates, non-tariff barriers, other border clearance costs, transshipment costs, and so on. In short, our simulation model is a comprehensive one for examining the impacts of broadly-defined trade costs. Our simulation analysis for Asia con-tributes to illustrating more clearly the powerfulness of the NEG in the CGE analysis on the trade cost reduction. It includes several scenarios of the improvement/development of routes and the reduction of the above-mentioned border cost.
    Full-text · Article · Aug 2013 · Economic Modelling
  • Source
    Kazunobu Hayakawa
    [Show abstract] [Hide abstract]
    ABSTRACT: This paper empirically investigates the firm-level relationship between the local input share and the number of used FTAs by employing the data on FTA utilization in Japanese affiliates in ASEAN. As a result, we do not find a robust linear relationship. However, affiliates using a large number of FTAs (seven or eight) have an extremely higher share of local inputs. This result might be interpreted as the first evidence of the “spaghetti bowl phenomenonâ€.
    Preview · Article · Jul 2013 · Economic Modelling
  • Kazunobu Hayakawa · Hansung Kim · Hyun-Hoon Lee
    [Show abstract] [Hide abstract]
    ABSTRACT: In this paper we empirically examine the determinants on utilization of the Korea–ASEAN Free Trade Agreement (KAFTA) by employing a database provided by the Korea Customs and Trade Development Institute. We find that, although three effects, namely preferential margin (margin effect), rules of origin restrictiveness (ROO effect), and average export volume (scale effect), contribute to determining the utilization of the FTA, the scale effect has the greatest impact. Our results suggest that, since firms with relatively small volumes of trade are usually small and medium-size enterprises (SMEs), policy assistance for reducing administrative costs should be geared toward SMEs. Our results further indicate that policymakers should also try to negotiate more extensive tariff reductions on products not only where MFN rates are high but also where shipments are large.
    No preview · Article · Jul 2013 · World Trade Review
  • Source
    Kazunobu Hayakawa · Hyun-Hoon Lee · Donghyun Park
    [Show abstract] [Hide abstract]
    ABSTRACT: There is a large and growing empirical literature that investigates the determinants of outward foreign direct investment (FDI). This literature examines primarily the effect of host country characteristics on FDI even though home country characteristics also influence the decision of firms to invest abroad. In this paper, we examine the role of both host and home country characteristics in FDI. To do so, we constructed a firm-level database of outward FDI from Japan, Korea, and Taiwan. Our empirical analysis yields two main findings. First, host countries with better environment for FDI, in terms of larger market size, smaller fixed entry costs, and lower wages, attract more foreign investors. Second, firms from home countries with higher wages are more likely to invest abroad. An interesting and significant policy implication of our empirical evidence is that policymakers seeking to promote FDI inflows should prioritize countries with higher wages.
    Full-text · Article · Jun 2013 · Global Economic Review
  • Source
    Kazunobu Hayakawa
    [Show abstract] [Hide abstract]
    ABSTRACT: In this paper, using the worldwide dataset of bilateral tariff rates, we explore how serious the omission of bilateral tariff rates in gravity is. Our findings are as follow. Firstly, the omission of bilateral tariff rates seems not to be so serious in terms of omitted-variable biases because the coefficients for the usual gravity variables do not change before or after their inclusion. Secondly, while the widely-used dummy variable of regional trade agreement could not play an alternative role in place of tariff rates, the inclusion of time-invariant pair fixed effects in addition to the time-variant importer fixed effects and exporter fixed effects accounts for the omission of tariff rates. The inclusion of those fixed effects makes the coefficient for bilateral tariff rates insignificant.
    Preview · Article · Mar 2013 · Journal of the Japanese and International Economies

Publication Stats

256 Citations
17.24 Total Impact Points

Institutions

  • 2008-2014
    • Institute of Developing Economies - Japan External Trade Organization
      Tiba, Chiba, Japan
  • 2007-2012
    • Keio University
      • • Faculty of Economics
      • • Graduate School of Economics
      Tokyo, Tokyo-to, Japan
  • 2011
    • Kangwon National University
      • Department of International Trade and Business
      Shunsen, Gangwon, South Korea