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Firm Exports and Multinational Activity under Credit Constraints
, 2009
"... Abstract. This paper provides firm-level evidence that credit constraints restrict international trade flows and affect the pattern of foreign direct investment. Using detailed data from China, we show that foreign-owned firms and joint ventures have better export performance than private domestic f ..."
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Cited by 42 (7 self)
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Abstract. This paper provides firm-level evidence that credit constraints restrict international trade flows and affect the pattern of foreign direct investment. Using detailed data from China, we show that foreign-owned firms and joint ventures have better export performance than private domestic firms, and this advantage is systematically greater in sectors at higher levels of financial vulnerability measured in a variety of ways. This confirms that financial frictions restrict international trade and is consistent with foreign affiliates being less credit constrained because they can tap internal funding from their parent company. Our results imply that FDI can compensate for domestic financial market imperfections and alleviate their impact on aggregate growth, trade and private sector development. Credit constraints and host-country financial institutions thus offer a new explanation for the sectoral and spatial composition of MNC activity.
Relational Contracts and Supplier Turnover in the Global Economy
, 2015
"... Headquarters and their specialized component suppliers have a vital interest in establish-ing long-term collaborations. When formal contracts are not enforceable, such efficiency-enhancing cooperations can be established via informal agreements, but relational con-tracts have been largely ignored in ..."
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Cited by 4 (3 self)
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Headquarters and their specialized component suppliers have a vital interest in establish-ing long-term collaborations. When formal contracts are not enforceable, such efficiency-enhancing cooperations can be established via informal agreements, but relational con-tracts have been largely ignored in the literature on the international organization of value chains. In this paper, we develop a dynamic property rights model of global sourc-ing. A domestic headquarter collaborates with a foreign input supplier and makes two decisions in every period: i) whether to engage in a costly search for a better partner, and ii) whether to make a non-binding offer to overcome hold-up problems. Our key result is that the possibility to switch partners crucially affects the contractual nature of buyer-supplier relationships. In particular, some patient firms do not immediately estab-lish a relational contract, but only when they decide to stop searching and thus launch a long-term collaboration with their supplier. From our model, we develop an instrumental variable estimation strategy that we apply using transaction-level data of fresh Chinese exporters to the US. We obtain empirical evidence in line with the theoretical prediction
Scale, Scope, and Trade Dynamics of Export Processing Plants." Johns Hopkins University mimeo.
, 2013
"... Abstract Export processing (EP) accounts for a signi…cant share of aggregate exports from many developing nations. It is the kind of trade through which many countries start participating in global trade. Without a clear understanding about how EP di¤ers from non-processing trade, directly comparin ..."
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Cited by 1 (1 self)
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Abstract Export processing (EP) accounts for a signi…cant share of aggregate exports from many developing nations. It is the kind of trade through which many countries start participating in global trade. Without a clear understanding about how EP di¤ers from non-processing trade, directly comparing export performance between countries with di¤erent dependence on EP may lead to misguided policies. This paper compares and contrasts export patterns and dynamics of EP …rms with those of ordinary (non-processing) exporters. Using transaction-level data for the universe of Chinese trading …rms over 2000-2006, we establish …ve stylized facts: compared to ordinary exporters, EP …rms (1) are larger but less diversi…ed in both products and destinations within the same industry; (2) start exporting with a larger volume but exhibit less upward mobility; (3) grow less both in the …rst year of entry and over time (within a market); (4) are less likely to move up to higher sales quintiles over time; (5) are more likely to start selling to more distant markets but less likely to penetrate into new markets after the …rst year of exporting. We con…rm that these facts are observed within …rms'ownership types (e.g., foreign versus domestic), industries, destination countries, or geographic regions. Among other alternatives, we propose that incorporating uncertainty in export sales in the standard heterogeneous-…rm model is a natural way to explain these facts.
and Export Market Entry: Does Foreign Ownership Structure Matter?
, 2015
"... Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, v ..."
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Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may be saved and copied for your personal and scholarly purposes. You are not to copy documents for public or commercial purposes, to exhibit the documents publicly, to make them
fondation pour les études et recherches sur le développement international Measuring the Pollution Terms of Trade with Technique Effects
"... Abstract The pollution terms of trade (PTT) index first introduced and estimated by ..."
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Abstract The pollution terms of trade (PTT) index first introduced and estimated by
The Dragon is Flying West: Micro-level Evidence of Chinese Outward Direct Investment
"... Abstract Outward direct investment (ODI) from the People's Republic of China (PRC) is surging. A common perception is that it was driven by the country's resource and technology-seeking motives. Using a new, unique, and comprehensive data set that covers close to 10000 Chinese ODI deals f ..."
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Abstract Outward direct investment (ODI) from the People's Republic of China (PRC) is surging. A common perception is that it was driven by the country's resource and technology-seeking motives. Using a new, unique, and comprehensive data set that covers close to 10000 Chinese ODI deals from 1998 to 2009, we find that in contrast to the common perception, over half of the ODI deals are in service sectors, with many of them appearing to be export-related. In addition to documenting the pattern and trend of the PRC's ODI, we empirically examine both the determinants and effects of ODI at the firm level. We find that ex ante larger, more productive, and more export-intensive firms are more likely to start investing abroad. Using matching estimation techniques, we find that ODI is associated with better firm performance, including higher total factor productivity, higher employment, higher export intensity, and more product innovation. To assess the relative contributions of technology transfer, export promotion, and resource seeking to the positive effects of ODI, we use ODI data merged with customs transaction-level trade data. We find that firms' ODI participation is associated with significantly better trade performance, measured by export and import volume, export and import unit values, and number of export destinations. In contrast with the technology-and resource-seeking motives, we find no evidence that ODI firms import more capital or intermediate inputs, compared to non-ODI firms.
Firm Investment and Exporting: Evidence from Chinas Value-Added Tax Reform
, 2015
"... This paper contributes to the literature by identifying the causal e¤ect of
rm investment on exporting behavior. The identi
cation hinges on regional variations in the 2004 value-added tax pilot reform in China, which generated positive invest-ment shocks. The instrumental variable estimation resul ..."
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This paper contributes to the literature by identifying the causal e¤ect of
rm investment on exporting behavior. The identi
cation hinges on regional variations in the 2004 value-added tax pilot reform in China, which generated positive invest-ment shocks. The instrumental variable estimation results show that
rm invest-ment signi
cantly and substantially increases the likelihood of exporting, and this e¤ect is largely due to the positive e¤ect of
rm investment on
rm productivity. Finally, the paper documents some heterogeneity of the e¤ect across industries with di¤erent degrees of competition and
nancial constraints.
Benefits of Foreign Ownership: Evidence from Foreign Direct Investment in China*
, 2014
"... To examine the effect of foreign direct investment, this paper compares the post-acquisition performance changes of foreign- and domestic-acquired firms in China. Unlike previous studies, we investigate the purified effect of foreign ownership by using domestic-acquired firms as the control group. A ..."
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To examine the effect of foreign direct investment, this paper compares the post-acquisition performance changes of foreign- and domestic-acquired firms in China. Unlike previous studies, we investigate the purified effect of foreign ownership by using domestic-acquired firms as the control group. After controlling for the acquisition effect that exists in domestic acquisitions, we find no evidence that foreign ownership can bring productivity gains to target firms. In contrast, a strong and robust finding is that foreign ownership significantly improves target firms ' financial conditions and exports relative to domestic-acquired firms. Foreign acquisition is also found to improve output, employment and wage for target firms. These findings conflict with the conventional view of productivity-driven FDI and highlight the financial channel through which FDI benefits the host countries.
credit, including © notice, is given to the source. Firm Exports and Multinational Activity Under Credit Constraints
, 2011
"... conference. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peer-reviewed or been subject to the review by the NBER Boa ..."
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conference. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peer-reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.
