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on International Activities of Firms |
| By: | Duong, K. T.; Huynh, L. D. T.; Lastauskas, P.; Vu, N. T. |
| Abstract: | Using firm-level panel data on cross-border sales for 27 African economies (2002-2022), we study how the African Continental Free Trade Area (AfCFTA) reshaped firms’ international trade. Guided by a heterogeneous-firm model with two short-run channels, export-network history and capital-adjustment frictions, linked through goods-services input linkages, we document that the 2018 signing raised the ratio of international to total sales by 2.7 percentage points (pp) by 2022. The gains were uneven: firms with prior export experience outside Africa gained 2.8 pp, versus 1.2 pp for Africa-only exporters, and goods-producing firms and those facing lower adjustment frictions responded most. Network history and adjustment frictions thus shape who benefits from continental integration and how gains propagate across the goods-services linkage, so that an intra-continental agreement disproportionately rewards extra-continental traders. |
| Keywords: | Adjustment Costs, Africa, Export Experience, Goods and Services Sectors, Ownership Structure, Trade Agreement |
| JEL: | F13 F14 F18 F63 |
| Date: | 2026–10–01 |
| URL: | https://d.repec.org/n?u=RePEc:cam:camdae:2680 |
| By: | Philip Bodenschatz; Peter H. Egger; Arne Nagengast |
| Abstract: | China’s export expansion increasingly challenges advanced-economy exporters in third markets. Using confidential German exporter data, we generalize the canonical China-shock instrument to multiple destinations, exploiting Chinese gains in products across similar markets. Within firms, export growth falls in destination-product markets where Chinese market shares rise, through weaker growth among continuing relationships and market exit. Growth in estimated quality and unit values also declines, while stronger quality, price, product, and destination advantages cushion losses. Market exit and weaker entry account for more than half of aggregate adjustment. Structural-gravity evidence attributes China’s gains mainly to quantity expansion and rising exporter-product competitiveness. |
| Keywords: | China shock, export competition, firm heterogeneity, German exporters, China-shock instrument |
| JEL: | F14 F12 L25 C26 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_13079 |
| By: | Cindy Justo; Antonio Navas; Enrico Vanino |
| Abstract: | This paper studies the heterogeneous effects of trade in services barriers on firm-level exports, focusing on the consequences of the UK withdrawal from the European Union and the introduction of the EU–UK Trade and Cooperation Agreement (TCA). Using detailed firm-level transaction data on UK services exports combined with sectoral measures of regulatory restrictiveness, we show that UK services exports to the EU declined significantly following both the Brexit referendum and the implementation of the TCA, with substantially larger effects after regulatory barriers were formally reintroduced. The effects are highly heterogeneous across firms, following an inverted U-shaped pattern with small and large firms more negatively affected, and are particularly pronounced for foreign-owned firms using the UK as an export platform. Crucially, we show that barriers related to foreign entry are the primary drivers of the observed decline, while other regulatory dimensions play a limited role. These findings highlight the importance of firm heterogeneity and regulatory alignment in shaping services trade outcomes. |
| Keywords: | trade in services, Brexit, trade and cooperation agreement, firm heterogeneity, services trade barriers, trade policy uncertainty |
| JEL: | D22 F13 F14 F15 F23 L80 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_13084 |
| By: | Alviarez, Vanessa; Cevallos Fujiy, Brian; Espinoza Escobar, Angel De Jesus; |
| Abstract: | Do the boundaries of the multinational firm shape how shocks propagate through global production networks? We link U.S. Bill of Lading microdata, geocoded natural disaster records, and cross-border ownership data to trace the transmission of exogenous supply disruptions from foreign suppliers to U.S. importers. Exploiting the quasi-random timing and location of natural disasters in a staggered event-study design, we document that disasters abroad generate sharp, persistent export declines at affected suppliers, shocks that propagate downstream, reducing the growth rate of U.S. importers total purchases by up to 25 percentage points. Transmission, however, is far from uniform: non-MNC buyers contract roughly twice as much as importers belonging to global corporations, and intra-firm relationships contract about a third less than arms-length ones. These patterns point to the internal networks of multinational firms as shock absorbers that attenuate and redirect supply-side disruptions, suggesting that firm boundaries are not merely organizational choices but also determinants of macroeconomic resilience. |
| Keywords: | natural disasters;Shock propagation;firm-to-firm trade;Multinational firms;Intra-firm trade;Production networks;Firms |
| JEL: | F14 F23 L14 L23 Q54 |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:idb:brikps:14800 |
| By: | Manova, Kalina; Moxnes, Andreas; Perello, Oscar |
| Abstract: | This paper examines intermediation in production networks to unpack the firm attributes and matching costs that govern firm-to-firm networks and the gains from trade. Exploiting rich customs data for Chile, we show that exporters of all sizes use intermediaries, mix trade modes across buyers, and set lower prices on intermediated flows. We rationalize these facts in a model of network formation with suppliers of heterogeneous productivity and matchability, buyers of heterogeneous productivity, and intermediaries that reduce matching costs for a brokerage fee. Empirical evidence on trade activity across firms and countries corroborates the model, and informs how geographic distance, logistics and customs efficiency, formal institutions, and cultural-linguistic similarity shape network costs. Model estimation reveals that sellers' attributes are negatively correlated, such that intermediaries enable highly productive sellers with low matchability to reach smaller buyers. This amplifies the welfare gains from intermediation due to wider and deeper network connectivity. |
| Keywords: | production networks;intermediation;productivity;matching costs |
| JEL: | F10 F12 F14 F23 L11 L14 L81 |
| Date: | 2025–03–03 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:141747 |
| By: | Gumpert, Anna; Manova, Kalina; Rujan, Cristina; Schnitzer, Monika |
| Abstract: | This paper provides an integrated analysis of multinational companies' global production and innovation. We establish novel stylized facts using rich data on the network of production affiliates and patent activity of German multinationals. We rationalize these facts with a heterogeneous-firm model, in which companies jointly determine the location and scale of production, basic innovation and applied innovation, under asymmetric complementarities across these three activities. Empirical evidence consistent with the model indicates that bigger MNCs innovate more intensively in terms of patent frequency and quality, and offshore innovation to more countries, including both countries with and without production affiliates. Moreover, MNCs' innovation portfolio follows countries' comparative advantage across technology classes, with applied innovation more likely to be co-located with production than basic innovation. |
| Keywords: | multinational firms;FDI;offshoring;innovation;patents |
| JEL: | F20 F23 L23 L24 O31 O32 |
| Date: | 2025–03–05 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:141746 |
| By: | Tu Ho (Osaka School of International Public Policy, The University of Osaka, 1-31 Machikaneyamacho, Toyonaka, Osaka, Japan) |
| Abstract: | This study uncovers the effect of corporate tax on FDI in Vietnam. We use GMM and fixed effects models with national and provincial databases between 2011 and 2023. At the provincial level, we use firm-level microdata from the annual Vietnam Enterprise Survey to calculate the effective corporate tax rate. We utilize statutory corporate tax rate differences between Vietnam and foreign countries obtained from national databases. This study finds a negative relationship between corporate tax and FDI. The negative association between the bilateral corporate tax difference and inward FDI is weaker for tax-haven countries than for non-tax-haven countries, although there is insufficient evidence of a statistically significant association for tax-haven countries. Our findings suggest that the government should maintain corporate tax incentives for disadvantaged provinces to promote a more balanced distribution of FDI. Moreover, the effective design of corporate tax policy to attract inward FDI should take into account not only domestic tax conditions but also the tax policies and tax systems of foreign countries. |
| Keywords: | corporate tax, foreign direct investment, effective corporate tax rate, tax havens, tax incentives, Vietnam |
| JEL: | F21 H25 H26 O53 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:dpc:wpaper:0206 |