Abstract
In the 2000s, after the Asian financial crisis, East Asian countries achieved rapid economic growth. Many Japanese frozen food companies focused on East Asian markets, but faced problems with the cold chain and refrigerators. In this study, we use the penetration rate of household refrigerators in the host country to calculate market access, which we then use to estimate the location choice model. The results of the conditional logistic model show that the location choice for Japanese frozen food companies is affected not only by the penetration rate of refrigerators, but also by traditional cost-reduction factors, such as wages and investment promotion policies in the host country. In addition, domestic market access encourages Japanese FDI in East Asia.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
Notes
The Plaza Accord (or Plaza Agreement) was an agreement between the governments of France, West Germany, Japan, the USA, and the UK to depreciate the USD in relation to the Japanese yen and German Deutsche Mark by intervening in the currency markets. The five governments signed the accord on September 22, 1985, at the Plaza Hotel in New York, USA.
The base year is 2005, USD.
The base year is 2005, USD.
\( 0 \le {\text{penref}} \le 1 \).
The 11 countries are 10 East Asian countries (China, Hong Kong, South Korea, Philippines, Malaysia, Indonesia, Thailand, Singapore, Vietnam, and India) and Japan.
In the case of final goods, DFTA differs from zero at the 10% level and penref differs from zero at the 5% level. In the case of intermediate goods, ln(cty) differs from zero at the 10% level, and ln(ptn) differs from zero at the 5% level.
These are the 10 Asian countries, other than Japan.
References
Access Asia (2009) Frozen food in China 2009: a market analysis
Akune Y, Tokunaga S (2003) Market access and supplier access of food industry in East Asia: usage of Redding and Venables. Rural economics and sociology: memories of the Institute of Agriculture and Forestry, University of Tsukuba, vol 28, pp 1–25 (in Japanese)
Akune Y, Tokunaga S (2012) Market access, supplier access and final processed food location for Japanese food industry FDI in East Asia. Stud Reg Sci 42(2):287–304 (in Japanese)
Belderbos R, Carree M (2002) The location of Japanese investments in China: agglomeration effects, keiretsu, and firm heterogeneity. J Jpn Int Econ 16(2):194–211
Chamberlain G (1980) Analysis of covariance with qualitative data. Rev Econ Stud 47:225–238
Euromonitor International (each year) World Consumer Lifestyles Databook
Fujita M, Thisse J-F (2013) Economics of agglomeration: cities, industrial location, and globalization, 2nd edn. Cambridge University Press, Cambridge, pp 453–471
Fujita M, Krugman P, Venables AJ (1999) The spatial economy: cities, regions, and international trade. MIT Press, Cambridge
Greene WH (2008) Econometric analysis, 6th edn. Pearson, Upper Saddle River, pp 841–843
Guimaraes P, Rolfe RJ, Woodward DP (1998) Regional incentives and industrial location in Puerto Rico. Int Reg Sci Rev 21(2):119–138
Guimaraes P, Figueiredo O, Woodward DP (2000) Agglomeration and the location of foreign direct investment in Portugal. J Urb Econ 47(1):115–135
Head K, Mayer T (2004) Market potential and the location of Japanese investment in the Europe Union. Rev Econ Stat 86(4):959–972
Head K, Mayer T (2011) Gravity, market potential and economic development. J Econ Geogr 11:281–294
Head K, Ries J, Swenson D (1995) Agglomeration benefits and location choice: evidence from Japanese manufacturing investment in the United States. J Int Econ 38(3–4):223–247
Horaguchi H (1992) Foreign direct investment of Japanese firms: investment and disinvestment in Asia. University of Tokyo Press, Tokyo (in Japanese)
Ikegawa M, Akune Y, Tokunaga S (2013) NEG model analysis for location choice of Japanese frozen food industry in East Asia: a case of final goods. In: Journal of Rural Economics. Special Issue, Proceedings of annual conference of the Agricultural Economics Society of Japan, pp 372–378 (in Japanese)
Ikegawa M, Akune Y, Tokunaga S (2014a) Domestic and foreign supplier access and location choice in the Japanese frozen food industry in East Asia: before and after the Asian currency crisis. In: Journal of Rural Economics. Special Issue. Proceedings of annual conference of the Agricultural Economics Society of Japan, pp 159–164 (in Japanese)
Ikegawa M, Akune Y, Tokunaga S (2014b) Empirical analysis of investment promotion and location choice for Japanese frozen food industry FDI Using the NEG model: focus on foreign investment incentives. Stud Reg Sci 44(3):371–387 (in Japanese)
Jin S, Tokunaga S (2007) Agglomeration effects and Japanese food industry investment in China—evidence from the cities. Stud Reg Sci 36(4):899–908
Kawatsu N (2012) Consumers and domestic market in ASEAN. Knowl Creat Integr 2012:56–73 (in Japanese)
Krugman P (1991) Increasing returns and economic geography. J Polit Econ 99(3):483–499
Lu J, Tokunaga S (2008) Market potential and location choice for the Japanese food industry FDI in East Asia: an approach of new economic geography. Stud Reg Sci 38(1):109–119
Lu J, Tokunaga S (2009) Supplier access and the location choice of Japanese Food Industry FDI in East Asia. Lett Spat Resour Sci 2(1):1–10
McFadden D (1974) Conditional logit analysis of qualitative choice behavior. In: Frontiers in econometrics, pp 105–142
Mizuho Research Center (2010) Consumption and domestic market in ASEAN: popularization of consumer electronics. Mizuho Report, June 9, 2010 (in Japanese)
Nihon Keizai Shinbun syuppan sya, Nikkei Share Investigation 2014, 2014 (in Japanese)
Nihon Syokuryou Shinbun sya, Syokuhin Sangyo Jiten, 2008 (in Japanese)
Redding S, Venables AJ (2004) Economic geography and international inequality. J Int Econ 62:53–82
Ruan W (2002) Globalization of food market and industry in China: increasing FDI. Nourin Kinyuu 55(5):21–37 (in Japanese)
Searates, Transit time/distances calculators http://www.searates.com/reference/portdistance/
Smith DF Jr, Florida R (1994) Agglomeration and industrial location: an econometric analysis of Japanese-affiliated manufacturing establishments in automotive-related industries. J Urb Econ 36(1):23–41
Takahashi D (2011) Trend of foreign direct investment and disinvestment by the Japanese food industry. In: Journal of Rural Economics. Special Issue. Proceedings of annual conference of the Agricultural Economics Society of Japan, pp 134–141 (in Japanese)
Tokunaga S, Ishii R (2000) An empirical analysis of agglomeration effects and location choice for Japanese electronics firms in East Asia. Regional cohesion and competition in the age of globalization, pp 127–143
Tokunaga S, Akune Y, Ikegawa M, Okiyama M (2015) An empirical analysis of Japanese industrial agglomeration and factors of supply chain internationalization in East Asia: a case of Japanese food, electronics, and automobile firms. RIETI-PDP (in Japanese)
Woodward DP (1992) Locational determinants of Japanese manufacturing startups in the United States. South Econ J 58(3):690–708
Acknowledgements
We are grateful for this opportunity and would like to thank Prof. Akune (Reitaku University) for assistance in writing this paper and helping with our studies. Also, we would like to thank Editage (www.editage.jp) for English language editing.
Funding
Funding was provided by Japan Society for the Promotion of Science (Grant No. 24330073).
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
About this article
Cite this article
Ikegawa, M., Tokunaga, S. Location choice for Japanese frozen food industry in East Asia using domestic market access with the penetration rate of refrigerators. Ann Reg Sci 61, 209–227 (2018). https://doi.org/10.1007/s00168-018-0865-6
Received:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s00168-018-0865-6