This book is the first book that provides comprehensive economic analysis of cross-border outsourcing by Japanese manufacturing firms based on microdata. Previous literature on many other countries has often been constrained by limited data availability about outsourcing, but research contained in this book exploits unique firm-level data and directly tests theoretical hypotheses derived from new firm heterogeneity trade models. Productivity, capital-labor ratio and R&D intensity are examined at the firm level. While rich empirical results in this book convince us how powerful the orthodox economic theory is in understanding Japanese firms, detailed firm-level findings, combined with accessible and concise overviews of Japanese international trade, are widely informative for international economists, experts of Japanese society, business strategists for offshoring, and policy makers in both developed and developing economies. This book further discusses how boundaries of Japanese firms, traditionally sheltered by language and cultural barriers, are affected by outsourcing decisions simultaneously crossing national borders and firm boundaries. The interpretations of Japanese characteristics in outsourcing have deep implications for understanding drastically changing Japanese business amid globalization.

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Eiichi Tomiura is a professor in the Faculty of Economics, Hitotsubashi University. As a program director and a faculty fellow of Japan's Research Institute of Economy, Trade and Industry (RIETI), he organized a research project, part of the results of which are reflected in this book. Prior to his current position, he was dean of the College of Economics, Yokohama National University, and a professor at the Research Institute of Economics and Business Administration of Kobe University. Professor Tomiura received his Bachelor's degree in economics from the University of Tokyo and his Ph.D. in economics from the Massachusetts Institute of Technology. He has published numerous papers on foreign outsourcing, foreign direct investment, import competition, economic geography, and other related topics in international refereed journals, including the Journal of International Economics, Review of International Economics, Regional Science and Urban Economics, Economic Inquiry, Research Policy, World Economy, *and Journal of the Japanese and International Economies. He was an associate editor of Japan and the World Economy* and served as an editorial board member of several journals. He was awarded the 58th Nikkei Prize for Excellent Books in Economic Science from the Nikkei Newspaper, the 55th Economist Award from the Mainichi Newspaper, and the 11th Kojima Kiyoshi Prize from the Japan Society of International Economics.

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