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on International Activities of Firms |
| By: | Lundquist, Kathryn; Jha, Rahul; Vishwanath, Reetuparna; Chi Pok Cheang |
| Abstract: | With the continuing trend of digitalization and its impacts on international trade participation of firms, this paper considers how cyber-readiness impacts trade participation rates, especially of micro-, small- and medium-sized enterprises (MSMEs). First, the paper seeks to define what cyber-readiness is, exploring the multiple components that support MSME digitalization and digital transformation including digital security. The paper then presents the results of a 2023 survey of businesses and policymakers that previously engaged with the International Telecommunication Union on how cyber-readiness is viewed by these groups. Lastly, the paper builds a cyber-readiness score to explore how this concept could be tested against trade participation. Although no correlation was found between the constructed index and international trade by either MSMEs or large firms, a positive correlation emerged between the cyber-readiness score and MSME productivity. |
| Keywords: | Cyber-readiness, cybersecurity, digitalization, digital transformation, small and medium-sized enterprises, MSMEs, firm productivity, trade participation, international trade, firmlevel survey |
| JEL: | F14 L25 M21 O33 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:wtowps:343986 |
| By: | Brancati, Emanuele (Sapienza University of Rome); Brianti, Marco (University of Bologna); Nosal, Jaromir (Boston College); Schiantarelli, Fabio (Boston College) |
| Abstract: | Using the universe of Italian customs from 2000 to 2021, matched to firm balance-sheets, we study how invoicing currency shapes exchange-rate exposure and profitability for two-sided trading firms. We document four facts. First, when a firm begins invoicing imports in dollars, it becomes far more likely to invoice exports in dollars the same year, with import-side adoption leading. Second, this matching is bilateral: a firm importing from a country in dollars disproportionately invoices exports to that country in dollars, a corridor structure that aggregate hedging cannot rationalize. Third, corridor alignment reduces profit variance beyond what aggregate net dollar exposure explains. Fourth, exchange-rate movements transmit to profits mainly through transactions rather than balance-sheet revaluation, and dollar-invoiced import quantities rise after a euro depreciation, concentrated in inputs linked to exports. We interpret these facts through a model of invoicing currency choice with a rich sourcing and export destination structure, driven by price-stability motives and the incentive to hedge country-specific risk. In the richest framework, invoicing currency choice is a real hedge against country risk, not only currency risk. |
| Keywords: | invoicing currency, exchange rate pass-through, corporate hedging, firm profitability, exchange rate exposure |
| JEL: | F14 F31 F41 |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18943 |
| By: | Emanuele Brancati; Marco Brianti; Jaromir Nosal; Fabio Schiantarelli |
| Abstract: | Using the universe of Italian customs from 2000 to 2021, matched to firm balancesheets, we study how invoicing currency shapes exchange-rate exposure and profitability for two-sided trading firms. We document four facts. First, when a firm begins invoicing imports in dollars, it becomes far more likely to invoice exports in dollars the same year, with import-side adoption leading. Second, this matching is bilateral: a firm importing from a country in dollars disproportionately invoices exports to that country in dollars, a corridor structure that aggregate hedging cannot rationalize. Third, corridor alignment reduces profit variance beyond what aggregate net dollar exposure explains. Fourth, exchange-rate movements transmit to profits mainly through transactions rather than balance-sheet revaluation, and dollar-invoiced import quantities rise after a euro depreciation, concentrated in inputs linked to exports. We interpret these facts through a model of invoicing currency choice with a rich sourcing and export destination structure, driven by price-stability motives and the incentive to hedge country-specific risk. In the richest framework, invoicing currency choice is a real hedge against country risk, not only currency risk. |
| JEL: | F31 F41 G32 |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:bol:bodewp:wp1232 |
| By: | Federico Gallina |
| Abstract: | Recent decades have witnessed a surge in the number of Free Trade Agreements (FTAs). This thesis studies how the approval of these agreements is affected by electoral accountability and how the rules of origin (RoO) embedded in FTAs affect firms’ sourcing decisions. In the first chapter, I combine data on legislators’ votes on FTAs with measures of their constituents’ economic interests. Contrary to influential arguments, Members of the European Parliament are more likely to support FTAs that benefit their constituencies, and alignment with constituents’ economic interests increases their probability of re-election. Similar patterns emerge for legislators in the US Congress. In the second chapter, I exploit Brexit as an exogenous trade shock and French administrative data to examine the firm-level effects of the RoO introduced by the EU-UK Trade and Cooperation Agreement (TCA). These rules reduce sourcing from non-TCA countries and decrease firms’ sales, employment, and productivity. In the third chapter, I construct product-level measures of RoO restrictiveness for South Korea’s FTAs with the European Union and the United States. I show evidence of spillovers across FTAs: differences in the restrictiveness of RoO lead to an increase in imports from the trade partner in the FTA with more restrictive RoO. |
| Keywords: | Electoral Accountability; Trade Agreements; EU and US legislators; Rules of Origin; Heterogeneous Firms; Input Sourcing; Trade Diversion |
| Date: | 2026–09–11 |
| URL: | https://d.repec.org/n?u=RePEc:ulb:ulbeco:2013/413350 |
| By: | Bonin, Simone Maria (Danmarks Nationalbank and Aarhus University); Gorshkov, Andrei (IFAU - Institute for Evaluation of Labour Market and Education Policy) |
| Abstract: | We study the transmission of firm-specific export shocks through labor markets, examining how these shocks influence workers’ wages at competing firms via labor market competition. Using rich Danish administrative data, a flexible, empirically driven definition of workers’ outside options, and an identification strategy based on world import demand shocks, we show that both own-firm and competitor export shocks raise incumbent workers’ wages. These export-driven shocks also trigger competitive worker reallocation, as expanding exporters poach workers from other firms. The results indicate spillover effects of export shocks extending to non-exporting firms. |
| Keywords: | labour market competition; export shocks; worker outside options |
| JEL: | F16 J23 J31 J63 |
| Date: | 2026–09–08 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:ifauwp:2026_016 |
| By: | Fabrizio Leone (Bank of Italy) |
| Abstract: | How does a domestic firm's production process change when it is taken over by a foreign multinational? Using a panel of Spanish manufacturing firms covering the 1990-2017 period, this paper shows that acquired firms become significantly more likely to adopt industrial robots and that this shift towards automation reduces their labour share. To isolate these effects from selection into foreign ownership and robot use, the analysis combines nearest-neighbour matching with a staggered event-study design. Following an acquisition, affiliates' labour share falls by 6.5 percentage points (15 per cent relative to the sample mean), while their probability of adopting robots rises by 11 percentage points (30 per cent relative to the sample mean); robot adoption alone accounts for roughly one third of the acquisition-induced labour share decline. These patterns are consistent with the predictions of a model in which heterogeneous firms choose both their ownership structure and whether to adopt robots. They also remain robust after controlling for alternative explanations for the decline in the labour share, including factor-biased technical change, intangible capital and market power. |
| Keywords: | foreign acquisitions, robots, automation, labour share |
| JEL: | F23 F66 O33 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:bdi:wptemi:td_1539_26 |