American Economic Journal:
Economic Policy
ISSN 1945-7731 (Print) | ISSN 1945-774X (Online)
Surviving the Global Financial Crisis: Foreign Ownership and Establishment Performance
American Economic Journal: Economic Policy
(pp. 30–55)
Abstract
We examine the differential response of establishments to the recent global financial crisis with particular emphasis on the role of foreign ownership. Using a worldwide establishment panel dataset, we investigate how multinational subsidiaries around the world responded to the crisis relative to local establishments. We find that, first, multinational subsidiaries fared on average better than local counterfactuals with similar economic characteristics. Second, among multinational subsidiaries, establishments sharing stronger vertical production and financial linkages with parents exhibited greater resilience. Finally, in contrast to the crisis period, the effect of foreign ownership and linkages on establishment performance was insignificant in noncrisis years. (JEL F23, G01, L22, M16)Citation
Alfaro, Laura, and Maggie Xiaoyang Chen. 2012. "Surviving the Global Financial Crisis: Foreign Ownership and Establishment Performance." American Economic Journal: Economic Policy 4 (3): 30–55. DOI: 10.1257/pol.4.3.30Additional Materials
JEL Classification
- F23 Multinational Firms; International Business
- G01 Financial Crises
- L22 Firm Organization and Market Structure
- M16 International Business Administration