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on International Activities of Firms |
| By: | Banri ITO; Naoto JINJI; Megumi NAOI |
| Abstract: | This paper uses an original firm survey conducted in the context of “Trump Tariffs 2.0†to document how firm attributes are associated with (i) the incidence and intensity of tariff impacts and (ii) the predictability and content of firms’ responses. Three findings emerge. First, reported impacts are widespread among exporters to the U.S. and are particularly pronounced for firms engaged in related-party (intra-firm) exports to the U.S., consistent with the fixed nature of internal transactions and practical constraints related to rules of origin, pricing, and regulatory compliance. Moreover, even among firms with low direct exposure to North American exports, those located further upstream in supply chains tend to report larger impacts, suggesting supply-chain spillovers that are not captured by direct export measures alone. Second, responses are strongly associated with firm size (sales), and adjustment appears more advanced among large, high-productivity firms. Third, regarding response choices, firms with intra-firm exports to the U.S. show a stronger relative preference for localization through foreign direct investment (FDI), whereas arms-length exporters tend to favor price/cost adjustments; firms exporting to China and Asia are more likely to pursue portfolio rebalancing through third-country shifts (including deeper reorientation within the region). From a policy perspective, beyond broad-based mitigation, strengthening firms’ adaptive capacity—especially by easing fixed costs and organizational constraints faced by smaller firms—and expanding practical support for third-country expansion are warranted. |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:eti:rdpsjp:26008 |
| By: | Giannoulakis, Stelios; Kanas, Angelos; Spaliara, Marina-Eliza; Tsoukalas, John |
| Abstract: | We examine the effects of the 2018-2019 U.S. tariffs on Greek goods exports using industry- and firm-level data within a difference-in-differences framework. The results reveal considerable heterogeneity: eight out of seventeen products experienced declines in exports, six saw increases, and the rest showed no significant change. Firm-level analysis confirms part of this heterogeneity. While many export-oriented firms were resilient, some in specific industries experienced either export and sales declines or gains. A notable case is the aluminum sector, where firms experienced substantial increases in exports, pointing to potential sector-specific advantages. We also find modest evidence of export market substitution as a mitigating strategy. Our findings highlight the nuanced, sector-dependent effects of trade policy shifts. Policymakers should design support for affected firms through targeted trade promotion, market diversification incentives, and streamlined export procedures to enhance resilience against trade shocks. |
| Keywords: | U.S. tariffs; Greek exports; difference-in-difference; export market substitution; export support schemes |
| JEL: | F14 |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:137249 |
| By: | Mitsuo INADA; Naoto JINJI |
| Abstract: | This study examines the effects of policy uncertainty (PU) on inward foreign direct investment (FDI). We contribute to the literature by addressing a key empirical challenge inherent in the staggered nature of signing international investment agreements (IIAs). We use microdata on foreign affiliates in Japan, combined with information on 27 IIAs between Japan and its partner economies that entered into force during 1995 and 2019. We find that PU primarily affects the intensive margin of inward FDI. Specifically, current reservations regarding most-favored-nation (MFN) treatment, when combined with national treatment (NT), reduce the ownership shares of parent firms. We also find that current NT reservations, as well as combined NT and MFN reservations, reduce employment by foreign affiliates. These results are robust, particularly for the subsample of foreign affiliates in the service sector. Finally, and in contrast to previous studies, we find no effects on the extensive margin. |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:eti:dpaper:26017 |
| By: | Megumi NAOI; Banri ITO; Naoto JINJI |
| Abstract: | We present some of the first evidence on how geopolitics shapes policy preferences of firms from a large-scale firm-level survey and experiment in Japan fielded during Trump’s 2025 tariff negotiations. The experiment varies scenarios of supply-chain disruption of critical goods across different causes (natural disasters vs. geopolitics) and the affected domestic actors (“your firm†vs. “Japanese citizens†) and elicits firms’ preferred policy among diplomatic negotiations, protectionism, and subsidies aimed at promoting diversification and domestic production. We find that geopolitical causes increase support for diplomatic solutions and reduce support for de-risking subsidies relative to the control condition (natural disaster). Contrary to the democratic peace conjecture, businesses support diplomacy regardless of alliance status or whether the disruption originates in the U.S. or China. A small minority (6%) support protectionism, especially when the disruption originates in a non-ally country or China. Overall, Japanese firms are not flag followers. |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:eti:dpaper:26016 |
| By: | Robert J R ELLIOTT; Wenjing KUAI; Toshihiro OKUBO; Ceren OZGEN |
| Abstract: | This paper examines how international engagements shape heterogeneity in the greenness of Japanese manufacturing firms. Using a new firm-level dataset, we construct intensity-based greenness indicators distinguishing between the greenness of market facing products and the greenness of more governance-driven production processes. Our empirical results are three-fold. First, green activity is widespread across Japanese manufacturing sectors but is predominantly process-oriented, with the greenest firms concentrated in a small subset of industrial activities. Second, greenness is not linked to internationalization in general, but to firms being embedded in global value chains (GVCs), particularly in Western oriented networks, and this association is stronger for green processes. Third, we identify a vulnerability whereby product greening does not attenuate tariff induced sales losses among internationally engaged firms, and green processes do appear to amplify tariff exposure, especially for GVC participants. Overall, the results highlight that going green is multidimensional and that environmental process compliance interacts with GVC integration in shaping firms’ resilience to trade policy shocks under a trend towards further geoeconomic fragmentation. |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:eti:dpaper:26018 |
| By: | Lundquist, Kathryn |
| Abstract: | With growing consumer concerns about the environmental and social impacts of their purchases, some multinational corporations (MNCs) have begun publishing lists of their first-tier and other upstream suppliers with varying levels of detail and analysis in Corporate Social Responsibility (CSR) reports to increase transparency. Going beyond traditionally used national and international inputoutput datasets, this paper presents a novel dataset and analyzes characteristics of actual global value chain (GVC) participating factories. Drawing from CSR reports of twenty multinationals identified using the Forbes 2000 list of publicly traded MNCs and covering over 10, 000 supplying factories in the apparel, accessories, and footwear sectors, it develops summary statistics on supplier location, factory size, and employee gender distribution. The insights offered provide a description of participation in MNC supply chains by firm size, income level, and workforce gender composition- firm-level characteristics that are generally unavailable in official statistics and often accessible only behind paywalls of private information and analytics providers. |
| Keywords: | Multinational Corporations (MNCs), Supplier Transparency, Corporate Social Responsibility (CSR) Reporting, Global Value Chains (GVCs), MSMEs, Supply Chain Disclosure, SMEs |
| JEL: | F23 L25 M14 J16 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:wtowps:336786 |
| By: | González, Felipe; Prem, Mounu |
| Abstract: | We study the economic effects of a large nationalization program using newly assembled firmlevel data from Chile under Salvador Allende (1970-73). Using a difference-in-differences design, we show that nationalization substantially reduced firm performance and international business activity relative to comparable private firms. Return on assets fell sharply and importing activity declined, with negative effects concentrated in manufacturing, while firms in strategic and natural resource sectors were largely unaffected. We also document lower electoral support for the incumbent coalition in more exposed municipalities. Overall, nationalization generated sizable and uneven economic costs with significant political consequences. |
| Keywords: | nationalization, state-owned enterprises, firm performance |
| JEL: | L33 D72 N36 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:glodps:1715 |