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on International Activities of Firms |
| By: | Harald Fadinger; Lei Li; Sophia Praetorius; Jan Schymik |
| Abstract: | We study how the U.S.–China trade war affected manufacturing activity in third countries using a novel plant-level dataset covering millions of establishments in 50 major economies, including affiliates of more than 200, 000 multinational enterprises (MNEs). Combining establishment-level data with detailed tariff information, we estimate the effects of U.S. and Chinese punitive bilateral output and input tariffs on sales, employment, and establishments across countries, industries, and stages of production. We find that third-country effects of the trade war are highly heterogeneous and largely offsetting, yielding moderately negative net effects overall. Most of the adjustment is driven by multinational enterprises reallocating activity across affiliate networks, while domestic firms respond much less. |
| Keywords: | Global value chains, firm location choice, multinational enterprise, trade policy, tariffs, tariff elasticity, upstreamness, downstreamness, output tariffs, input tariffs, third country effects of trade policy |
| JEL: | F13 F14 F23 |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2025_776 |
| By: | Ryan Kim; Bin Ni; Hyunseung Oh; Choongryul Yang |
| Abstract: | We study an income-account channel of exchange-rate transmission using matched data on Japanese multinational parents and their foreign affiliates. During the sharp yen depreciation of 2021–22, we find that (i) foreign affiliates with greater exchange-rate exposure expanded their activity and generated more profits, with larger payments to their Japanese parents, and (ii) more exposed parents increased their average wages and shifted employment toward commercial branches and offices involved in sales, purchasing, and related business functions, with offsetting declines in other employment. A multinational firm model in which scarce parent-side support inputs are allocated between domestic operations and foreign affiliates rationalizes these findings. To study the aggregate implications, we embed this mechanism in a two-country general-equilibrium model with trade and multinational production. The model shows that moving foreign-market activity from exports to affiliate production reduces the domestic real GDP response to depreciation and shifts more of the external adjustment from trade and toward income earned abroad. Depreciation therefore need not generate a large expansion in domestic production. |
| Keywords: | exchange rates; multinational firms; current account; Japan |
| JEL: | F31 F23 F32 F41 |
| Date: | 2026–09–04 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedgif:103753 |
| By: | Terhi Maczulskij; Outi Jurvanen |
| Abstract: | This paper examines how firms’ environmental performance responds to product- and destination-specific export demand shocks in their export markets. We draw on unique administrative data for Finnish manufacturing firms from 1999 to 2018, matched with national customs records, greenhouse gas emissions, and energy use. The results show that while export demand shocks significantly increase firms’ export volumes and energy consumption, they do not improve overall environmental performance. Specifically, we find no significant effects on carbon intensity or total energy intensity, although fuel intensity declines, particularly in more polluting industries. Heterogeneity and mechanism analyses further reveal that financially weaker firms experience increases in emissions and carbon intensity, suggesting that financial constraints may limit their ability to adopt cleaner technologies. Overall, the findings highlight the critical role of firm-level characteristics in shaping the environmental consequences of trade shocks and suggest that export-promotion policies should account for firms’ financial capacities to support green investments and sustainable outcomes. |
| Keywords: | Emissions, Energy expenditure, Energy intensity, Export demand shock, Firm-level, Carbon intensity |
| JEL: | D22 F22 O30 |
| Date: | 2025–08–25 |
| URL: | https://d.repec.org/n?u=RePEc:pst:wpaper:354 |
| By: | Brancati, Emanuele (Sapienza University of Rome); Nucci, Francesco (Sapienza University of Rome); Pietrovito, Filomena (University of Molise); Pozzolo, Alberto (Roma Tre University) |
| Abstract: | This paper explores the interplay between firms' credit constraints, innovation, and export decisions. Using survey data for Italian manufacturing firms, we document strong complementarity between the two activities: innovation raises export participation, while exporting stimulates R&D. Credit rationing significantly reduces both the probability and intensity of exporting and innovation, but its effects are heterogeneous. The negative impact of credit rationing on export participation is substantially attenuated by innovation, whereas exporting provides only limited protection against the effects of financing constraints on innovation. We interpret these findings through a stylized theoretical framework in which exporting and innovation are mutually reinforcing but operate through distinct channels: innovation directly enhances export profitability through cost reductions, whereas exporting stimulates innovation only indirectly by expanding market opportunities. Overall, our findings suggest that policies fostering innovation may generate a double dividend by promoting technological upgrading while simultaneously strengthening firms' ability to sustain export activity under financial constraints. |
| Keywords: | innovation, exporting, financial constraints |
| JEL: | F14 G21 O31 |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18902 |
| By: | Demir, Banu; Rappoport, Veronica |
| Abstract: | This article reviews recent evidence on how credit availability shapes exports. Advances in empirical strategies and the increasing availability of detailed firm- and transaction-level data shed light on mechanisms linking firms’ financial conditions to their entry, survival, and growth in export markets. Emerging work on the interaction between bank and trade credit highlights additional channels affecting export contracts. We conclude by outlining open questions and directions for future research. |
| Keywords: | trade finance;credit constraints;exports;letters of credit;trade credit;global value chains |
| JEL: | F14 F40 G21 |
| Date: | 2026–06–09 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:138927 |