Surviving the Global Financial Crisis : Foreign Ownership and Establishment Performance

Surviving the Global Financial Crisis : Foreign Ownership and Establishment Performance

This paper examines how different establishments performed during the recent global financial crisis, focusing on the role of foreign ownership. The paper investigates how foreign ownership affected establishments' responses to negative econom...

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Bibliographic Details
Main Authors: Alfaro, Laura, Chen, Maggie Xiaoyang
Format: Policy Research Working Paper
Language:English
Published: 2012
Subjects:
AFFILIATED ORGANIZATIONS
AMERICAN ECONOMIC ASSOCIATION
AMERICAN ECONOMIC REVIEW
ASSETS
BANK CREDIT
BANKING SYSTEM
BANKRUPTCY
BENCHMARK
BENCHMARK DATA
BUSINESS CYCLE
CAPITAL FLOWS
CAPITAL INTENSITY
CAPITAL MARKETS
COUNTRY DUMMIES
CREDIT RATINGS
DEBT
DEPENDENT
DEVELOPMENT ECONOMICS
DEVELOPMENT POLICY
DIRECT FOREIGN INVESTMENT
DOMESTIC DEMAND
ECONOMIC CRISES
ECONOMIC CRISIS
ECONOMIC DOWNTURN
ECONOMIC DOWNTURNS
ECONOMIC EXPANSION
ECONOMIC GROWTH
ECONOMIC INTERDEPENDENCE
ECONOMIC PERFORMANCE
ECONOMIC RESEARCH
ECONOMIC SHOCKS
ECONOMIC VOLATILITY
EMERGING ECONOMIES
EXPORTS
EXPOSURE
FINANCIAL CONSTRAINTS
FINANCIAL CRISES
FINANCIAL CRISIS
FINANCIAL DEVELOPMENT
FINANCIAL MARKETS
FINANCING CONSTRAINTS
FOREIGN CURRENCY
FOREIGN CURRENCY DEBT
FOREIGN DIRECT INVESTMENT
FOREIGN INVESTMENT
FOREIGN INVESTMENTS
FOREIGN OWNERS
FOREIGN OWNERSHIP
FUTURE RESEARCH
GDP
GLOBAL CAPITAL
GLOBAL CAPITAL FLOWS
GROWTH RATES
HOME COUNTRIES
HOME MORTGAGE
HUMAN CAPITAL
INDUSTRIAL COUNTRIES
INPUT-OUTPUT
INSOLVENT
INSOLVENT FIRMS
INSTITUTIONAL INVESTOR
INTERNATIONAL TRADE
LENDERS
LIQUIDITY
LIQUIDITY CONSTRAINTS
LIQUIDITY CRUNCH
MANUFACTURING INDUSTRIES
MANUFACTURING INDUSTRY
MARKET SHARE
MORTGAGE
MORTGAGE INVESTMENT
MULTINATIONAL CORPORATION
MULTINATIONAL CORPORATIONS
MULTINATIONAL FIRMS
OWNERSHIP INFORMATION
PARENT COMPANIES
POLITICAL ECONOMY
PRODUCTIVITY
PROTECTIONISM
PUBLIC REGISTRIES
REVIEW OF ECONOMICS
SALES GROWTH
SHARE OF CAPITAL
STANDARD ERRORS
STOCK PRICES
TAX
TECHNOLOGY TRANSFER
TOTAL OUTPUT
TOTAL REVENUE
TRADE LIBERALIZATION
UNEMPLOYMENT
UNEMPLOYMENT RATE
UNEMPLOYMENT RATES
VERTICAL INTEGRATION
VOLATILITY
WORLD ECONOMY
WORLD TRADE
Online Access:http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20120112121253
http://hdl.handle.net/10986/3231
Description
Summary:This paper examines how different establishments performed during the recent global financial crisis, focusing on the role of foreign ownership. The paper investigates how foreign ownership affected establishments' responses to negative economic shocks, using a cross-country panel dataset with detailed information on operation, location and industry for more than 12 million establishments from 2005-2008. The evidence shows that multinational subsidiaries on average fared better than local counterfactuals with similar economic characteristics. Among multinational subsidiaries, establishments with stronger production and financial linkages with parent companies showed greater resilience. Finally, in contrast to the crisis period, the impact of foreign ownership and linkages on an establishment's performance was insignificant in non-crisis years.

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