We show that multinational firms transmit shocks across countries through their internal capital markets. We study a credit supply shock to parent firms in Germany. International affiliates outside Germany supported their parents through internal lending, became financially constrained themselves, and experienced lower real growth. We find that managers were "Darwinist" with respect to international affiliates but "Socialist" in the home country, that internal capital markets transmitted the credit shock more strongly than a non-financial shock, and that access to developed credit markets attenuated the real effects. The total real impact of shock transmission through multinationals on foreign economies was large.
We study how firms’ international linkages to Russia and Ukraine have affected investors’ expectations following the outbreak of the Russian-Ukrainian war. We perform an event study around the Russian invasion into Ukraine on February 24, 2022. We find that having trade linkages to Russia in the top decile is associated with a decrease in the cumulative return by 2.16 percentage points and having an affiliate in Russia with a decrease by 3.12 percentage points. Having an affiliate in Ukraine has, however, no effect on firms’ stock market returns. The total impact of trade linkages on the aggregate stock market performance of third countries was on average 0.8 percentage points and of multinational linkages was on average 0.73 percentage points. The losses were largest in European countries.
This paper analyzes the consequences of the change in the presentation mode of
economics seminars triggered by the COVID-19 pandemic. The composition of seminar speakers changed significantly. The share of seminars held by women increased.
The leading economists in terms of recent output and top young top economists also
gained shares. The geography of knowledge dissemination shifted significantly as
the distance between host and speaker institutions increased on average by 32 percent.
The growing inequality in presentations among speakers is correlated with an
increase in inequality in terms of citations. The results imply that virtual presentations
instead of traveling can decrease gender-specific inequality and increase inequality by
productivity in the profession.
The Quarterly Journal of Economics (QJE) managed by Harvard University and the Journal of Political Economy (JPE) managed by the University of Chicago are two of the top five journals in the economics profession. Drawing on the acknowledgements of more than 2,000 publications in the top five journals, this article documents a robust and significant correlation between presenting at Harvard University and publishing in the QJE and between presenting at the University of Chicago and publishing in the JPE. Articles presented at Harvard (Chicago) and published in the QJE (JPE) have, on average, a similar impact in terms of citations as other articles published in the QJE (JPE).
This paper investigates how management practices as intangible transfers are associated with the performance of multinational business groups. Differences in the management level across source countries are predictive for multinationals’ entry patterns for a given destination country. This study uses acquisitions as a means to transplant management practices from parents to affiliates abroad. It finds that better-managed parents decrease employment and increase productivity post-acquisition. The productivity gains are driven by targets with less developed management practices and by targets of larger parents. Better-managed parents are also more likely to install or retain a manager from the parent country post-acquisition.
What effect did trade have on the size distribution of firms during the first wave of globalization? Three historical datasets from the German Empire between 1875 and 1907 were collected and harmonized to answer this question. This paper combines industry census and bilateral railway trade data from the same industry and region along with industry-level tariff data. The evidence shows that increases in aggregate trade caused the share of firms to shift from smaller to larger firms. Exogenous decreases in tariffs caused an increase in the share of the largest firms. The regional distributive effects of trade on inequality between firms that are discussed in the contemporaneous literature were already present during the first wave globalization.
Environmental Preferences and Deep Trade Agreements (with Gonzague Vannoorenberghe)
Financing Service Trade (with Peter Eppinger and Karol Paludkiewicz)