The Multinational Capital Advantage

Sarah Clifford and Jakob Miethe

No 12244, CESifo Working Paper Series from CESifo

Abstract: This study shows that internal capital markets confer a significant resilience advantage to multinational enterprises (MNEs) during banking crises. First, we document that MNEs experience half the debt contraction of domestic firms during these events. Second, subsidiaries affected by a crisis increase their reliance on intra-group borrowing, offsetting declines in external debt. Third, this ‘multinational capital advantage’ translates into higher post-crisis growth in employment and investment. While this improves the resilience of the host economy to banking crises, the multinational capital advantage may also contribute to the rising market shares of MNEs and increasing firm concentration observed in recent decades.

Keywords: multinational enterprises; internal capital markets; banking crises (search for similar items in EconPapers)
JEL-codes: F21 F23 G15 (search for similar items in EconPapers)
Date: 2025
New Economics Papers: this item is included in nep-fdg and nep-iaf
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.ifo.de/DocDL/cesifo1_wp12244.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_12244

Access Statistics for this paper

More papers in CESifo Working Paper Series from CESifo Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Wohlrabe ().