Haruka Takayama

Working Papers

"Greenfield or Brownfield? FDI Entry Mode and Intangible Capital"

• • Abstract: When a multinational firm invests abroad, it can either establish a new facility (greenfield investment, GF) or purchase a local firm (cross-border merger and acquisition, M&A). Using a novel US firm-level dataset, I provide the first evidence that multinationals with higher levels of intangible capital systematically invest through GF rather than M&A. Motivated by this empirical result, I develop a general equilibrium search model of a multinational firm’s choice between M&A and GF. The model implies that equilibrium FDI patterns can be suboptimal. In particular, policymakers in less developed economies can increase welfare by incentivizing M&A. By allowing highly productive multinationals to use local intangible capital, this policy raises aggregate productivity relative to the laissez-faire outcome.

"Air Connectivity and International Travel: Evidence from Cross-border Card Payments" (with Chun-Yu Ho, Tingting Peng, and Li Xu)

• • Abstract: Many countries seek to attract foreign travelers by improving air connectivity. How do direct flight connections affect international visitors' spending? We address this question using a novel dataset on card payments made by Chinese travelers via point-of-sale (POS) terminals. Our identification strategy exploits overseas improvements in air transportation capacityーarising from infrastructure developments, policy changes, and historical eventsーwhich we treat as exogenous supply shocks to flight frequency. Our IV estimates indicate that a 1% increase in the weekly frequency of direct flights leads to a 1.2% increase in cross-border card transaction value. While improving air connectivity promotes international travel, we find that negative shocks to consumer preferences for destination countries, such as boycotts, diminish the positive impact of air connectivity.

"Does Trade with Multinationals Induce Greener Production? Evidence from the Bangladesh Fashion Industry" (with Kazi Iqbal, Moogdho Mim Mahzab, and Kazuki Motohashi)

• • Abstract: There is growing attention to the need for firms to ensure that their suppliers meet production standards (i.e., responsible sourcing). This practice is particularly prevalent in the apparel industry, as buyers—especially multinationals with well-known brands—often require their suppliers to comply with stringent environmental standards. We study how trading with global fashion brands affects the environmental performance of their suppliers in Bangladesh. Using a novel dataset that combines custom data with river water quality data, we find that an increase in the number of exporters to brand multinationals improves the river water quality surrounding these exporters. Our findings highlight the crucial role multinational buyers play in mitigating industrial pollution, particularly in developing countries with weaker regulatory enforcement. 

"Industry Linkages, Uncertainty, and Cross-border Mergers" (with Laura Alfaro and Anusha Chari)

• Abstract: Multinational firms are strategically changing their organizations in response to escalating geopolitical risks. This paper investigates the role of mergers and acquisitions (M&A) in restructuring firm organizations in a time of uncertainty. Our initial step quantifies the relative distance between acquiring and target firms within a production value chain. Regression analysis shows that heightened economic policy uncertainty correlates with a greater likelihood of cross-border acquisitions occurring at more distant production stages. We present a conceptual model grounded in the hypothesis that firms integrate farther along global value chains during times of uncertainty. The implications of our model align consistently with the empirical findings, highlighting the trade-off between synergies and exposure to unexpected shocks in vertical integration decisions along the global production network.

Works in Progress

• "Private Equity in the Global Market for Corporate Control" (with Stephen Yeaple) 

• "Multinationals, Greenfield Investment, and the Environment" (with Rahul Gupta, Xian Jiang, and Mahdi Shams)

• "The Distribution of Windfall Revenues: Evidence from School Districts and FDI" (with Brett Fischer)

Other Writings

• “On the Use of AIS Data For Economic Research in the Field of International Trade”

  • RIETI Policy Discussion Paper Series 22-P-011 with Eiichi Tomiura (written in Japanese)

• "An International Comparison of FDI Entry Modes"

  • RIETI Policy Discussion Paper Series 20-P-017 with Yukiko Saito (written in Japanese)

• "FDI and the Local Labor Market: Japanese Automobile Plant Openings in the 1980s"

  • Abstract: Using US census data, I investigate how much Japanese automobile firms' investments contributed to local wage increases over the 1980s. My difference-in-differences estimation shows that the effect is not significant with a whole sample, but different by race. In particular, Black workers experienced a 9.3 percent wage decrease in areas where a Japanese assembly plant opened, and I consistently observed the negative effects in regressions with other specifications. My analysis also suggests a regional difference in the wage increase, and auto workers in the West experienced a larger wage increase than workers in the other regions.

Teaching

Instructor (University at Albany, SUNY)

• Theory of International Economics (AECO 745, for PhDs)

• International Trade (AECO 445/545, for masters)

• International Macroeconomics (AECO 446/546, for masters)

• International Economic Relations (AECO 360,  for undergrads)