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on International Activities of Firms |
| By: | Maczulskij, Terhi |
| Abstract: | Abstract This paper examines how firms’ innovation activity responds to product- and destination-specific export demand shocks in their export markets. I draw on unique administrative data for Finnish manufacturing firms from 1999 onwards, matched with national customs records, patent data, and innovation and R&D surveys. The analysis reveals that positive export demand shocks significantly increase patenting activity and the likelihood of introducing new product innovations, while negative shocks reduce patenting and exports. The study finds that these innovation responses are dynamic, with patent applications rising in the short term and granted patents materializing over longer horizons. Heterogeneity analysis shows that more productive and financially stronger firms benefit disproportionately from export demand expansions. This pattern suggests that financial constraints may limit the ability of firms to adopt new innovations even as they expand production. |
| Keywords: | Export demand shock, Firm-level, Innovation, Manufacturing |
| JEL: | F14 O19 O30 |
| Date: | 2025–12–22 |
| URL: | https://d.repec.org/n?u=RePEc:rif:wpaper:134 |
| By: | Kujtim Avdiu; Jochen Güntner; Karin Mayr-Dorn; Esther Segalla |
| Abstract: | This paper studies the external and internal financing decisions of multinational enter prises (MNEs) and their role in the transmission of shocks across borders. We augment the costly-state-verification model of Bernanke et al. [1999] with the internal capital market constraint of an MNE and derive predictions for the optimal response of external and internal borrowing, both at home and abroad, to a change in the return on capital of a foreign affiliate. Using mandatory-reporting data on all Austrian MNEs and their FDI relationships with German affiliates for 2007–2022, we validate our theoretical pre dictions empirically and find that Austrian parent firms extend less internal credit to more productive German affiliates and reduce their own stock of external liabilities with domestic banks relative to the affiliate’s total assets, whereas more productive German affiliates reduce their share of internal liabilities with Austrian parents and increase their external leverage instead. |
| Keywords: | Bank lending, external finance, financial frictions, internal capital markets, multinational firms |
| JEL: | D24 E44 F23 G32 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:jku:econwp:2025-13 |
| By: | Jan Baran (Narodowy Bank Polski; University of Warsaw); Patryk Czechowski (Narodowy Bank Polski); Jakub Mućk (Narodowy Bank Polski; Warsaw School of Economics) |
| Abstract: | In this paper we examine the role of the electromobility transformation for exports of the automotive sector. To do so, we propose a novel mapping of granular codes of automotive products into three categories: (i) combustion-specific, (ii) neutral, and (iii) electric-specific. We estimate a standard gravity model of the trade flows of automotive products, comparing the three categories with each other. We demonstrate that key drivers of export of the electric-specific products are similar to the combustion-specific ones. However, exports related to electric vehicles are more technologically intensive and supported by either a domestic R&D potential or international knowledge spillovers through FDI. In particular, export-oriented production of electric-specific intermediates proves to be to a large extent R&D intensive. Our results also suggest that the ongoing structural change in the automotive industry leads rather to intra-industry reorganization than to more fundamental restructuring of existing Global Value Chains. |
| Keywords: | automotive industry, international trade, gravity model of trade, structural change, electric vehicles, electromobility, Global Value Chains |
| JEL: | F14 L16 L62 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:nbp:nbpmis:379 |
| By: | Lu, Yue; Ma, Minghui; Liu, Kehan; Tang, Yao |
| Abstract: | Using a two-country Melitz model, we analyze how China's massive railway expansion generates trade gains via vertical linkages. Domestic gains stem from both a composition effect in which improved domestic market access enabled by railway encourages downstream firms to source more inputs domestically and hence raise the domestic value added ratio (DVAR), and a scale effect in which better market access boosts the output level. Intermediate good producers in the foreign country also benefit despite the composition effect, as the scale effect associated with expanded demand from Chinese firms dominates. We test the theoretical predictions with panel data on Chinese manufacturing firms in 2000-2007, addressing endogeneity using a control function approach. Our main empirical findings confirm: (1) Improved upstream access increases exporters' DVAR (explaining 11.57% of its interquantile variation) along with higher value added and revenue; (2) Better access to downstream buyers boosts upstream intermediate producers' value added, profits, and revenue; (3) Foreign intermediate good producers benefit from increased import varieties and quantities of Chinese firms. |
| Keywords: | railway infrastructure, domestic value added ratio, intermediate inputs |
| JEL: | F1 R4 |
| Date: | 2025–10–28 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:126901 |
| By: | Konstantin Egorov; Vasily Korovkin; Alexey Makarin; Dzhamilya Nigmatulina |
| Abstract: | How effective are trade sanctions? We study the unprecedented sanctions imposed on Russia following February 2022, when Western countries banned exports accounting for 36% of Russia's prewar import value. Combining novel, hand-collected records of these sanctions with Russian customs data, firm balance sheets, domestic railway shipments, and government procurement contracts, we provide the most comprehensive analysis to date of the economic impact of trade sanctions on a target country. Using a difference-in-differences approach, we find that imports of sanctioned country-product varieties into Russia saw a sharp 55% decline after the war's onset. Although we document substantial rerouting through third countries, it has not fully offset the direct import losses: total imports of sanctioned products fell by 27% through 2023. Russian firms that had relied on soon-to-be-sanctioned imports experienced a 14% decline in output during the same period, not offset by competing firms or entrants. Similar declines are present for manufacturing and technology firms, and firms along the military supply chain. Affected firms have also experienced reduced government procurement sales and incurred additional losses when their buyers or suppliers were exposed to sanctions. Overall, our findings suggest that, contrary to widespread claims of ineffectiveness, export sanctions on Russia have had far-reaching adverse effects. |
| Keywords: | international trade, Russia-Ukraine war, trade sanctions, export controls, geoeconomics |
| JEL: | D22 D74 F14 F51 H56 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12341 |
| By: | Nguyen, Thao Trang (RS: GSBE other - not theme-related research, Mt Economic Research Inst on Innov/Techn); Domini, Giacomo; Grazzi, Marco; Moschella, D.; Treibich, Tania (RS: GSBE MORSE, Macro, International & Labour Economics) |
| Abstract: | We examine the effects of adopting automation technologies on the export performance of French manufacturing firms during the 2002–2019 period. Adoption is identified through imports of automation-related capital goods, and its effects are estimated by means of a staggered difference-in-differences method. Our results indicate that automation significantly improves export outcomes, such as export value, the export to sales ratio and particularly the number of destination countries. However, its effect on the number of exported products is limited. These results are primarily driven by single-product firms, which expand their product portfolios, often toward more complex products, and increase their presence in high-income countries. Multi-product firms, instead, tend to streamline their product offerings while targeting low-income markets. These findings underscore the distinct mechanisms of learning effects and resource reallocation that shape automation strategies and drive export success. |
| JEL: | L11 L22 L25 O14 |
| Date: | 2025–11–28 |
| URL: | https://d.repec.org/n?u=RePEc:unm:unumer:2025028 |
| By: | Ricardo Correa; Andrea Fabiani; Matias Ossandon Busch; Miguel Sarmiento |
| Abstract: | We study the role that cross-border firm-to-firm credit plays in financing exporters. Exploiting the exogenous shock of US tariffs on Chinese goods in 2018–2019, we examine the response of Colombian firms – bystanders not targeted by trade policy – to redirected US demand. Using credit registry information for cross-border and domestic non-financial firm financing, we find that almost 40 percent of the total credit sourced by exporters came from cross-border firm-to-firm credit at end-2019, which represented 80 percent of their cross-border credit. In contrast to traditional trade credit, which is typically short-term, firm-to-firm credit has an average maturity of almost 2 years, and has characteristics resembling bank lending. Our findings highlight an overlooked financial channel underpinning the international trade network. |
| Keywords: | trade disruptions, cross-border credit, firm-to-firm credit, global value chains |
| JEL: | G21 F34 F42 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:bis:biswps:1315 |
| By: | Egorov, Konstantin; Korovkin, Vasily; Makarin, Alexey; Nigmatulina, Dzhamilya |
| Abstract: | How effective are trade sanctions? We study the unprecedented sanctions imposed on Russia following February 2022, when Western countries banned exports accounting for 36% of Russia's prewar import value. Combining novel, hand-collected records of these sanctions with Russian customs data, firm balance sheets, domestic railway shipments, and government procurement contracts, we provide the most comprehensive analysis to date of the economic impact of trade sanctions on a target country. Using a difference-in-differences approach, we find that imports of sanctioned country-product varieties into Russia saw a sharp 55% decline after the war's onset. Although we document substantial rerouting through third countries, it has not fully offset the direct import losses: total imports of sanctioned products fell by 27% through 2023. Russian firms that had relied on soon-to-be-sanctioned imports experienced a 14% decline in output during the same period, not offset by competing firms or entrants. Similar declines are present for manufacturing and technology firms, and firms along the military supply chain. Affected firms have also experienced reduced government procurement sales and incurred additional losses when their buyers or suppliers were exposed to sanctions. Overall, our findings suggest that, contrary to widespread claims of ineffectiveness, export sanctions on Russia have had far-reaching adverse effects. |
| Keywords: | sanctions, international trade, Russia-Ukraine war, geoeconomics |
| JEL: | D22 D74 F14 F51 H56 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:bofitp:333959 |
| By: | Bui Van, Vien; Vo Huu, Khanh; Tran The, Tuan |
| Abstract: | Export performance has become increasingly important for Vietnamese manufacturing SMEs as they face digital transformation and stronger global competition. This study investigates how resource-based determinants affect the export performance of Vietnamese manufacturing SMEs, with absorptive capacity (mediation) and international competition (moderation). Cross-sectional survey data from 420 manufacturing SMEs in Vietnam, collected during February–August 2025 and completed by authorized firm representatives (owners/ directors/ senior managers). Partial Least Squares Structural Equation Modeling (SmartPLS 4.1) with 5, 000 bootstraps was employed. Digital transformation (β = 0.304, p |
| Keywords: | exports; SMEs; RBV; absorptive capacity; competition; digital transformation |
| JEL: | F14 L25 O33 |
| Date: | 2025–12–22 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:127537 |