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on International Activities of Firms |
| By: | Pierluigi Murro; Valentina Peruzzi |
| Abstract: | This paper examines whether judicial enforcement shapes firms' participation in global value chains (GVCs). Exploiting Italy's 2013 court reorganization as a natural experiment, we combine firm-level survey data with administrative records and implement a spatial discontinuity IV design. We find that longer trials significantly reduce the probability of GVC participation: even delays of just a few weeks in civil proceedings translate into sizeable declines, underscoring the economic value of timely enforcement. The effect is concentrated among downstream firms and in trade with advanced markets, and operates through external finance, product complexity, and firm opacity |
| Keywords: | Global value chains; Judicial enforcement; Regional development; Product complexity |
| JEL: | F10 F61 K41 R11 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:sap:wpaper:wp264 |
| By: | Utsoree Das (University of Geneva); Erik Katovich (University of Connecticut); Jonah M. Rexer (The World Bank) |
| Abstract: | Empirical evidence and economic theory suggest multinational firms are more productive than their local counterparts. What explains the persistence of local firms and the recent surge in local content policies? Using a global database of corporate ownership changes for 35, 567 commercial mines between 2000-2022, we test whether local firms have a comparative advantage in dealing with weak institutions, corruption, and conflict, which could attenuate or reverse the multinational advantage. We confirm that, on average, output declines by 8% after mines are taken over by local firms. Localized assets also exhibit higher air pollution, indicating lower operational quality. However, in states with weak governance, localization increases mine output by 8%. Local firms also generate more economic activity, urbanization, and non-agricultural employment around mines, indicating stronger local linkages. While multinational mining firms exhibit increasing returns to scale, local firms exhibit decreasing returns, suggesting they may grow based on their ability to navigate institutional weaknesses rather than their productivity. Results highlight the role of institutions in determining relative advantages of multinational versus local firms. |
| Keywords: | Resources, governance, firm ownership, foreign investment, conflict |
| JEL: | F L O Q |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:inf:wpaper:2025.15 |
| By: | Luis Espinoza (Texas A&M University); Jose Morales-Arilla (School of Government and Public Transformation, Tecnológico de Monterrey) |
| Abstract: | We examine how geographic proximity can substitute for contract-enforcement institutions in enabling international exports of specialized goods. When ex-porters must meet buyers’ specific product requirements, successful trade de-pends on either strong contract enforcement or close buyer-seller relationships that enable monitoring and trust. We argue that geographic proximity facilitates such relationships by reducing the costs of frequent business travel. Our theoretical framework predicts that institutional quality should primarily affect specialized trade over longer distances, as proximity-based relationship-building becomes prohibitively expensive. Using bilateral, product-specific export data in a gravity model, we find strong empirical support for this prediction. Consistent with our theory, we also show that business travel expenses and passenger flights decline more sharply with distance when destination countries have weak contract enforcement institutions. |
| Keywords: | International trade, Contract enforcement, Relationship-specific trade, specialized goods, Gravity model, Business travel. |
| JEL: | D72 D83 L82 O54 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:gnt:wpaper:10 |
| By: | Egger, Hartmut; Elke, Jahn; Meier, Philipp |
| JEL: | F23 R12 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:vfsc25:325399 |
| By: | Philippe Andrade; Alexander Dietrich; John Leer; Xiao Lin; Raphael Schoenle; Jenny Tang; Egon Zakrajšek |
| Abstract: | Amid evolving global trade policy and rising tariff uncertainty, understanding how small and medium-sized businesses (SMBs) form expectations about future costs and adjust their pricing is critical for assessing how the recently imposed tariffs on US imports could impact consumer prices. To that end, we analyze several waves of a survey of owners and other decision-makers at a nationally representative sample of US SMBs, defined as companies that employ 500 or fewer workers. We focus on waves conducted during the period of December 2024 to August 2025. |
| Keywords: | business expectations; surveys; tariffs; cost pass-through; inflation |
| JEL: | C83 E31 F13 F14 F40 |
| Date: | 2025–09–29 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedbcq:101819 |
| By: | Tsambou, André Dumas; Diallo, Thierno Malick |
| Abstract: | Despite the growing evidence on the importance of African countries' participation in global value chains (GVCs), relatively little is known about the role of innovation. This paper tends to fill this gap by examining the effects of innovation on firms' GVC participation in francophone Africa. We rely on survey data covering over 9535 firms in 18 countries. Using propensity score matching and instrumental variable methods, we find strong evidence that innovation is positively related to firms' GVC participation, with large variation across innovation and GVC measures. We also find that the innovation impact varies according to firm size, with significant effects for small firms. |
| Keywords: | Innovation, Global Value Chains, Firm, Francophone Africa |
| JEL: | Q55 F14 D24 O55 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:sgscdp:327117 |
| By: | Michela GIORCELLI; Yuki HIGUCHI; Yutaro TAKAYASU; Mari TANAKA |
| Abstract: | In the aftermath of World War II, a large-scale management program, sponsored by the United States and known as the Productivity Program, was implemented in several European countries and Japan. The program involved sending corporate executives to observe business practices at U.S. firms and aimed to share modern management practices and enhance productivity in the recipient countries. In this paper, we first summarize the similarities and differences in how the program was implemented in Japan and European countries based on historical documents. Next, using data on Japanese firms that participated in the program, combined with a database of stock-listed firms, we document the characteristics of participating firms and compare them to other stock-listed firms during the same period. We also provide a simple comparison of firm performance over the first two decades of the program between participating firms and non-participating firms with similar initial characteristics. |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:eti:dpaper:25092 |
| By: | Bin NI; Ayako OBASHI; Ting YIN |
| Abstract: | This paper empirically examines whether globally operating firms responded to institutional changes promoting women’s participation in the workplace by reducing gender wage disparities to a greater extent. We construct a dataset by linking the Basic Survey on Wage Structure (Ministry of Health, Labour and Welfare) with the Basic Survey of Japanese Business Structure and Activities (Ministry of Economy, Trade and Industry). Using a triple-differences approach, we estimate changes in gender wage gaps before and after the institutional change under the Act on Promotion of Women’s Participation and Advancement in the Workplace, taking into account the presence, scale, and geographic scope of foreign direct investment (FDI). The results indicate that firms engaging in FDI experienced a statistically significant narrowing of gender wage gaps compared with firms without FDI, and the effect was stronger in firms with larger numbers of foreign affiliates. These findings suggest that firms with greater global exposure were more responsive to the institutional change and more likely to undertake employment adjustments and reforms toward gender-equal work environments. In addition, the analysis reveals that firms with affiliates in countries or regions with larger time-zone differences from Japan exhibited relatively weaker effects, potentially disadvantaging female employees and minimizing the impact of the institutional change. |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:eti:rdpsjp:25024 |
| By: | Constance Marette; Camilo Umana Dajud; Vincent Vicard |
| Abstract: | This paper investigates how multinational enterprises (MNEs) adapted their global operations in the post COVID-19 period. Using the pandemic as a natural experiment, we analyze how MNEs adjusted employment across their foreign and domestic affiliates in response to economic disruptions and shifting perceptions. Leveraging a crosscountry, firm-level dataset, we employ a difference-in-differences approach among treated groups to assess the causal differential response of MNEs relative to domestic firms. MNEs outperformed domestic firms following the pandemic, driven primarily by the stronger performance of their domestic affiliates. We also find evidence of home bias in adjustments within MNEs: employment growth was significantly higher in domestic affiliates than in foreign ones. These patterns intensified through 2022, suggesting persistent shifts in MNE strategies. |
| Keywords: | Multinational enterprises;COVID-19 crisis;Globalization;Reshoring;Establishment response;Affiliates' network;Foreign ownership |
| JEL: | F23 F61 L22 |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:cii:cepidt:2025-10 |
| By: | Jonas HJORT; Yukiko SAITO; Yasuka TATEISHI; Linda WU |
| Abstract: | Japanese firms have long benefited from foreign direct investment (FDI) in Asia, relocating labour-intensive production to lower-wage countries. In the past decades, however, wages in many Asian host countries have risen rapidly, while wages in Japan have remained stagnant, narrowing the wage gap and increasing the cost of offshore production. This study examines how these shifting cost dynamics affect investment decisions, drawing on 20 years of administrative data and an original survey of Japanese FDI firms conducted in November 2024. The data reveal a sharp narrowing of wage differentials alongside slower new investment and rising exits. Survey evidence indicates that most firms either take no action or, at most, make intensive-margin adjustments on increasing labour costs. While rising labour costs are not the dominant reason for withdrawal, subsidiary wage growth is positively associated with exit due to labour cost increases, suggesting that continued wage convergence may contribute to a future downturn in Japanese FDI in Asia. |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:eti:dpaper:25090 |
| By: | Matteo Neri-Lainé; Gianluca Orefice; Michele Ruta |
| Abstract: | This paper studies the effect of regional trade agreements on firms' exports using detailed information on the content of trade agreements and firm-level exports for 31 developing countries between 2000 and 2020. Moving from shallow to deep trade agreements - i.e. agreements that regulate border and behind-the-border policies - boosts firms' exports, on average, by 3.6 percent. In line with models of trade with heterogeneous firms, this effect is stronger for large firms and firms involved in global value chains and (weakly) negative for small firms, suggesting a competition effect of deep trade agreements with significant welfare consequences for signatory countries. An Instrumental Variable strategy and a battery of robustness tests confirm the causal interpretation of the results. |
| Keywords: | Regional Trade Agreements;Exports;Firm Heterogeneity;Developing Countries |
| JEL: | F13 F14 F15 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:cii:cepidt:2025-11 |