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on International Activities of Firms |
| By: | Hale Utar; Alfonso Cebreros Zurita; Luis Torres |
| Abstract: | Using confidential longitudinal firm-level trade data from Mexico (2015-2021), we examine whether the 2018-19 US-China trade war triggered adjustments in Global Value Chains (GVCs) and nearshoring to Mexico. Leveraging the abrupt US trade policy shift as a natural experiment, we construct firm-level trade policy exposures based on pre-shock product portfolios and find that US tariff hikes on China significantly increased Mexican firms' exports to the US, imports from Asia and the US, and net exports overall. By distinguishing firms in GVCs and identifying their parent countries, we show that foreign Multinational Enterprises (MNEs) in technology-intensive industries were the primary drivers of this adjustment. The trade war also reshaped sourcing patterns, boosting the use of firm-specific duty permits. Heterogeneous responses between US and non-US MNEs highlight nearshoring dynamics and GVC reorganization toward Mexico. Our findings provide firm-level evidence of the transformative impact of trade policy on GVCs and the role of MNEs in channeling trade policy spillovers to third countries. |
| Keywords: | Trade War, GVCs, Supply Chain Adjustment, MNEs, Nearshoring, Mexico, US, China |
| JEL: | F13 F14 F23 F61 F68 |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:crm:wpaper:2546 |
| By: | Francesco Paolo Conteduca; Marco Errico; Fabrizio Leone; Ludovic Panon; Giacomo Romanini |
| Abstract: | Bilateral trade shocks affect firms in third countries by redirecting demand and reallocating competition across markets, creating winners and losers. We propose a tractable trade model with heterogeneous firms to decompose firm-level export responses as a function of destination-specific changes in demand, own-price and cross-price elasticities, and external economies of scale. Using the 2018–2019 US-China trade war as a source of exogenous variation and data on the universe of Italian firms, we show how bilateral trade shocks occurring elsewhere identify these primitives for third countries. On average, the US-China trade war created a 2.5% export gain, albeit with substantial heterogeneity across firms. The external economies of scale channel accounts for three-quarters of changes in export performance. |
| Keywords: | firm heterogeneity, reallocation, scale economies, trade wars |
| JEL: | D21 D22 E65 F13 F14 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12629 |
| By: | George Cui; Xiaosheng Guo; Leticia Juarez |
| Abstract: | This paper examines the impact of trade credit and bank loans on firms’ exchange rate passthrough. Using a comprehensive dataset combining customs transaction records and balance sheet data for Chinese exporters during 2000–2011, we document that firms that more intensively extend trade credit to their buyers exhibit more complete exchange rate pass-through. Further empirical investigation sheds light on the underlying mechanism. First, the use of trade credit is positively correlated with exporters’ dependence on bank loans. Second, firm-level bank loan interest rates decline following home currency depreciation. Motivated by these findings, we develop a theoretical model in which exporters constrained by working capital simultaneously extend trade credit to buyers and rely on bank borrowing. The model shows that home currency depreciation improves exporters’ profitability, lowers default risk, and reduces borrowing costs, ultimately enhancing exchange rate pass-through. By endogenizing the interest rate through firm-level default risk, the model reveals a novel channel through which firms’ financial activities shape the dynamics of exchange rate pass-through. |
| Keywords: | Exchange rate pass-through; Trade credit; Financial constraints |
| Date: | 2026–04–24 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2026/084 |
| By: | Curzi, Daniele; Fiankorb, Dela-Dem Doe; Solazzo, Roberto; Valenti, Daniele |
| Abstract: | We study how global wheat market shocks transmit to export prices of pasta and related wheat based products. We first estimate a Bayesian structural vector autoregression for the world wheat market using annual data from 1970 to 2022 on production, inventories, real wheat prices, and global economic activity. The model yields structural shocks that capture unexpected shifts in wheat supply, global activity, consumption demand, and inventory demand. We then link these shocks to Italian customs microdata on export unit values by firm, product, and destination from 2004 to 2022, controlling for firm, product, destination, and market conditions. We find economically meaningful pass through from global wheat price movements driven by demand and inventory forces, while supply shocks have weaker and slower effects. Price responses are asymmetric, with larger adjustments following positive shocks than negative shocks. Heterogeneity analyses suggest smaller pass through for firms that import wheat directly, consistent with input sourcing and risk management dampening exposure. The results highlight the role of global commodity shocks in food price formation and the importance of firm level strategies in buffering international price volatility. |
| Keywords: | Crop Production/Industries |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:ags:aes026:397895 |
| By: | Baumgart, Eike; Blaufus, Kay; Paczkowski, Katharina |
| Abstract: | We provide firm-level evidence on expected tax burdens under the OECD's Pillar Two minimum tax using hand-collected financial statement disclosures from listed multinational groups headquartered in countries where Pillar Two has already taken effect. Our setting exploits a common reporting framework that requires inscope firms to assess and disclose material tax liabilities under the global minimum tax, allowing us to study the early incidence of the reform across firms and jurisdictions. We find that expected burdens are highly concentrated: although most firms disclose exposure to Pillar Two, only 22.5% recognize positive global minimum tax liabilities, and a few firms account for much of the total reported burden. Cross-sectional variation in global minimum tax liabilities is strongly associated with firm exposure to low-taxed foreign income and a group's international presence. At the same time, substantial cross-country differences remain, despite harmonized rules and accounting standards. These differences are positively associated with country-level tax enforcement. Our results suggest that the early expected incidence of Pillar Two is considerably less uniform than its common legal framework might suggest. |
| Keywords: | Global Minimum Tax, Pillar 2, Corporate Taxation, International Taxation, Tax Enforcement |
| JEL: | H25 H26 F23 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:arqudp:340834 |