The International Propagation of Economic Downturns Through Multinational Companies: The Real Economy Channel

Jan Bena, Serdar Dinc and Isil Erel

No 27873, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We study how non-financial multinational companies propagate economic declines from their subsidiaries located in countries experiencing an economic downturn to subsidiaries in countries not experiencing one. We find that investment is 18% lower in subsidiaries of these parents relative to the same-industry, same-country subsidiaries of parents that are headquartered in the same parent country but do not have a subsidiary in a country experiencing an economic downturn. The employment growth rate in the affected subsidiaries is zero or negative while it is 1.4% in the subsidiaries of unaffected parents. The aggregate industry-level sales and employment are also negatively impacted in the countries of the affected subsidiaries.

JEL-codes: F23 G01 G31 (search for similar items in EconPapers)
Date: 2020-09
Note: CF IFM ITI
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Published as Jan Bena & Serdar Dinc & Isil Erel, 2021. "The international propagation of economic downturns through multinational companies: The real economy channel," Journal of Financial Economics, .

Downloads: (external link)
http://www.nber.org/papers/w27873.pdf (application/pdf)

Related works:
Journal Article: The international propagation of economic downturns through multinational companies: The real economy channel (2022)
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:nbr:nberwo:27873

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w27873

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().