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on International Activities of Firms |
| By: | Dohse, Dirk; Fehrenbacher, Sophia |
| Abstract: | African innovators typically suffer from severe resource constraints and need to develop strategies to cope with these constraints. This paper focusses on external knowledge sourcing and, in particular, on the role of cooperation as a means to compensate for missing resources. Findings suggest that domestic inter-firm coop eration is of outstanding importance for firm-level innovation in Nigeria, whereas cooperation with other partners (research institutions, foreign firms, consultants, or the government) has no sizable impact on the innovative performance of Nigerian firms. Moreover, we show that it is in particular young firms and firms suffering from financial constraints that benefit from cooperation, whereas foreign-owned firms benefit less. Our findings contribute to a better understanding of the drivers of firm-level innovation in sub-Saharan Africa and have important implications for firm strategies and innovation policy |
| Keywords: | Resource-constrained innovation, Knowledge sourcing, Inter-firm cooperation, Coactive learning, Africa |
| JEL: | D22 L25 O32 O36 O55 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ifwkie:323982 |
| By: | Salome Baslandze; Simon Fuchs |
| Abstract: | We study the role of supply chain disruptions in shaping consumer prices, focusing on both firms’ own import shocks and strategic responses to competitors’ disruptions. Using a newly constructed micro-level dataset that links transaction-level U.S. import data from Bills of Lading with high-frequency consumer prices and sales from a consumer panel, we develop a novel approach to estimate the price effects of cost shocks and product availability. Motivated by a model of delivery delays, cost shocks, and firm pricing, we implement a shift-share identification strategy based on delivery shortfalls, port congestion, and freight and import costs. We find sizable pass-through elasticities: firms raise prices in response to higher import costs and delivery delays, especially when disruptions persist. We also identify strategic pricing: firms—including non-importers—increase prices in response to competitors’ supply chain disruptions. Using our estimates and back-of-the-envelope calculations from the model, we show that strategic interactions significantly amplified the direct effects of supply chain shocks on consumer prices during the pandemic. |
| Keywords: | supply chains, inflation, delivery delays, strategic interactions, pass-through, inventory |
| JEL: | E31 F14 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12079 |
| By: | Mao, Haiou; Görg, Holger |
| Abstract: | Geographical Indication (GI) is a rising policy in developing countries, which has been relatively neglected in the existing literature. This article studies Chinese agricultural GIs and its impact on firms’ exports. By relating newly authorized GIs with firm‐product‐location‐destination level customs trade data according to GIs’ geographical coverage and product type, we estimate the impact of these new GIs on firm's exports. Importantly, we can distinguish GIs with and without quality supervision. For the latter we find negative impacts on export quality, which is not the case for GIs with quality supervision. We interpret this in the context of our theoretical framework as evidence for quality free‐riding, where individual firms have an incentive to lower the quality of the export product. We show that this negative effect is less, the more concentrated an industry is or the more GIs there are for a particular product. Furthermore, our results suggest that the China‐EU agreement on Geographical Indications may play the role of quality supervision and prevent the possibility of free‐riding. |
| Keywords: | Agricultural Geographical Indications, China, export quality, free-riding |
| JEL: | F10 Q18 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ifwkie:323987 |
| By: | Sajid Anwar; Sizhong Sun |
| Abstract: | This paper examines how adverse supply-side shocks in domestic input markets influence firms' vertical outward foreign direct investment (OFDI) decisions. While the theoretical basis for cost-driven OFDI is well established, empirical evidence on the causal mechanisms remains limited. We develop a framework in which input cost shocks raise unit production costs, but firms undertake vertical OFDI only when shocks are sufficiently severe or when baseline costs are already high. Firm heterogeneity leads to a sorting pattern, whereby more productive firms are more likely to invest abroad. To test this mechanism, we exploit China's 2017 waste paper import ban as an exogenous shock and leverage a distinctive feature of the paper product industry's supply chain. Using a difference-in-differences strategy and firm-level data from 2000 to 2023, we find that the policy shock increased the probability of vertical OFDI by approximately 16% in the post-policy period relative to a control group. These results provide robust evidence that firms respond to domestic input shocks by reallocating production across borders, highlighting vertical OFDI as a strategic response to supply-side disruptions. The findings contribute to understanding the micro-foundations of global production decisions in the face of input market volatility. |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2508.21291 |
| By: | Mauricio Calani; Paula Margaretic; David Moreno |
| Abstract: | This paper exploits the exogenous changes of destination/origin-specific trade uncertainty (TU) to investigate the direct and spillover effects of TU on firms' foreign-trade operations and credit outcomes. Using transaction-level data of Chilean firms and banks, we first show that increasing TU dampens export growth through a deterioration of firms' working capital. This is especially true when exports are mainly financed by cash-in-advance, a payment mode that entails shorter and less permanent relationships between firms. Second, we find that increases in TU induce a bank-firm portfolio redistribution away from small firms toward large importers and firms involved in the global value chain (GVC). Our results are consistent with a risk-mitigating channel from banks that grant larger loans to firms that are perceived as relatively less risky during periods of high trade tensions. This way, TU shocks spill over to other firms not initially affected by TU through the bank credit market. |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:chb:bcchwp:1027 |
| By: | Kazuhiro Takauchi (Kansai University); Tomomichi Mizuno (Kobe University); Qing Hu (Kansai University) |
| Abstract: | To enjoy the preferential access of a free trade area (FTA), rules of origin (ROO) of the FTA defines how much to use regional contents. Hence, ROO defines the inter-firm transactions among upstream and downstream firms. We show asymmetric multiple equilibria in the downstream market "one firm meets ROO while the other does not" can appear for the effect of regional upstream competition. Importantly, our results, which correspond the real situation, maximizes consumer and total surpluses in the final-good importer. Hence, if the practitioner in the country concerned promoting utilization of the FTA, it may backfire. |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:koe:wpaper:2519 |
| By: | David Kohn; Emiliano Luttini; Michal Szkup; Shengxing Zhang |
| Abstract: | We study how trade finance and long-term relationships between exporters and importers facilitate international trade by allowing exporters to learn about demand uncertainty and counterparty risk. Using detailed micro-level Chilean data, we document that new exporters are more likely to use cash-in-advance (CIA) arrangements and gradually switch to providing trade credit as they continue to export. These dynamics affect export growth and are more salient for firms with less exporting experience and selling to riskier destinations. We set up an international trade model in which firms make exporting and trade financing decisions subject to demand and counterparty risks and estimate it using microdata. We then use the model to quantify the relative importance of demand and counterparty risks and investigate how trade finance choices and learning affect the dynamics of exports. Our model implies that the response of aggregate exports and the number of exporters to shocks to aggregate interest rates can overshoot in the short run if long-term relationships and relationship-specific knowledge are destroyed. Building relationships takes time, making the response to these shocks sluggish and persistent. Crucially, these responses depend on the riskiness of trade destinations. |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:chb:bcchwp:1031 |
| By: | Manabu Furuta (Graduate School of Economics, Kobe University) |
| Abstract: | This study evaluates the effectiveness of government financial support for small and medium-sized enterprises (SMEs) in Japan during the COVID-19 pandemic. The Japanese government implemented various programs to support SMEs facing financial distress, leading to a notable decline in bankruptcies. We find that SMEs with strong ties to main banks and exporters were more likely to receive support, while subsidiaries or affiliates of large corporations were less likely to benefit. Although prior studies suggest that such policies may encourage "zombie" firms, our analysis shows that in the manufacturing sector, financial assistance fostered investment. JEL Classification: D22; D25; L52 |
| Keywords: | SMEs; COVID-19; Financial Support; PSM-DID |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:koe:wpaper:2518 |
| By: | Thiele, Rainer; Necker, Tomke; Spitzer, Cara |
| Abstract: | Multiple geopolitical disruptions have highlighted the need for firms to diversify their supply chains. For Germany and the EU, this might imply an increased reliance on Africa, the neighboring continent, for example when it comes to sourcing critical raw materials for the energy transition towards renewables. In this paper, we critically assess whether Africa can indeed play a significant role in Europe's strategy of diversifying supply chains and reducing its dependence on China in particular. |
| Abstract: | Eine Vielzahl geopolitischer Verwerfungen haben für Unternehmen die Notwendigkeit deutlich gemacht, Lieferketten stärker zu diversifizieren. Für Deutschland und die EU könnte dies zu einer stärkeren Hinwendung zum Nachbarkontinent Afrika führen, etwa wenn es darum geht, die Versorgung mit kritischen Rohstoffen für die Energiewende sicherzustellen. In diesem Artikel wird kritisch diskutiert, ob Afrika eine nennenswerte Rolle dabei spielen kann, Europas Lieferketten zu diversifizieren und insbesondere die Abhängigkeit von China zu reduzieren. |
| Keywords: | supply chains, critical raw materials, textiles and clothing, China, Africa |
| JEL: | F15 L67 L72 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ifwkie:317904 |
| By: | Keiichiro HONDA; Takuya KAWANISHI; Yusuke ADACHI |
| Abstract: | This study empirically examines the impact of increasing export activity of firms in regional cities on local businesses. National and local governments implement various policies to support firms and attract investment, aiming to promote exports and increase foreign direct investment (FDI) in Japan. While some firms have successfully expanded their markets, many local businesses remain unglobalized, limiting their growth. However, when firms expand through exports or FDI, they may form supply chains with local businesses, generating positive spillover effects on the regional economy. If such effects are confirmed, export promotion and FDI attraction policies could be even more effective than expected. Using microdata from Japanese manufacturing establishments aggregated at the municipality level, this study investigates the spillover effects of an increase in exporting establishments or export value on non-exporting establishments in the same municipality, focusing on their sales, employment, and wages per worker. |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:eti:rdpsjp:25019 |
| By: | Videnord, Josefin (Tillväxtanalys) |
| Abstract: | This paper explores how firm-specific trade opportunities affect R&D investments and innovative activities. To construct trade opportunities that are exogenous to firm-level decisions, I use the variation in export and import patterns and exploit the fact that firms differ in their product-country exporting (sourcing) patterns. Both export and import opportunities generate growth in terms of sales, value-added, overall employees, and high-skilled employees. Despite having similar effects on firm growth, the effects on innovation activities are very different for the two trade shocks. Export opportunities lead to more R&D investments (spending, employees, and intensity) and innovations (product and process). On the other hand, import opportunities show no effects on R&D investments, and the impact on product, process, and service innovation is negative. |
| Keywords: | R&D; Innovation; International; trade; Export; Import |
| JEL: | F10 F14 O31 O32 |
| Date: | 2025–08–29 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:ifauwp:2025_014 |
| By: | Malik, Shahroo; Lahiri, Sajal |
| Abstract: | We explore the impact of export quality on the levels of exports and domestic trade. First, we developed a theoretical framework, using the two-country oligopolistic model with quality differentials in product. We find that a consumer-preference driven increase in export quality improves export performance of a country but it reduces domestic trade, in the absence of any constraint on production capacity. We then test the theoretical findings empirically, using annual bilateral inter-country and intracountry trade data for 142 countries from 1963 – 2014 and by applying the gravity model of trade. We use the IMF’s Export Quality Index to estimate a two-stage gravity model and to examine the effects of exports quality on both exports and domestic trade. Our empirical findings are consistent with our theoretical predictions. The empirical findings suggest that a one percent increase in quality leads to an increase in total exports by 1.08% and a fall in intra-national trade by 2.69%. We also find that the effect of export quality is more pronounced for OECD member countries than the non-OECD member countries. |
| Keywords: | Export Quality; International Trade; Domestic Trade; OECD |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:wiw:wus005:76995586 |
| By: | Lehr, Jakob |
| Abstract: | Using the German census of the manufacturing industry, I analyze the impact of import competition on carbon emissions per unit of deflated sales (emission intensity). I combine precise information on firm‐level CO emissions with sector‐level trade flows. Looking at the period 1995 until 2017, I focus on the impact of the rise of Eastern Europe and China while addressing the endogeneity of trade flows with an instrumental variable approach. The baseline results suggest that a 1 pp increase in the import penetration ratio caused a reduction of the average firm's emission intensity by approximately 0.3%. This result implies that the rise of the joint East between 1995 and 2017 kept the average firm's emission intensity 6% below the level it would have had in the absence of the East's rise. I do not find strong indication for reallocation of production towards more efficient firms. Finally, I supplement the analysis by examining the effect of export opportunities due to the East's rise. The results indicate that exporting to the East increased sales and emissions, with a small, if any, negative effect on emission intensities. |
| JEL: | F18 Q54 L60 D22 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ifwkie:323985 |