Cross-border investments and uncertainty: Firm-level evidence
Timothee Gigout and
Additional contact information
F. Tripier: EPEE - Centre d'Etudes des Politiques Economiques - Université Paris-Saclay - UEVE - Université d'Évry-Val-d'Essonne
Post-Print from HAL
This paper studies the impact of uncertainty on cross-border investments. We build a data-set of firm-level outward Foreign Direct Investments between 2000 and 2015. We create a time and country varying measure of uncertainty based on the dispersion of idiosyncratic investment returns. An increase in uncertainty delays cross-border flows to the affected country. Yet, this average effect hides strong heterogeneity. Firms with low ex-ante performance durably reduce their foreign investments. Meanwhile high-performing firms increase their investments after the initial shock. We interpret these results as the evidence of a cleansing effect of uncertainty shocks among multinational firms in the presence of financial frictions. © 2020
Keywords: Uncertainty; Multinational firms; Asymmetric uncertainty; FDI flows; FDI returns; Volatility (search for similar items in EconPapers)
Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-02877942
References: Add references at CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed
Published in Journal of International Money and Finance, 2020, ⟨10.1016/j.jimonfin.2020.102159⟩
There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.
Journal Article: Cross-border investments and uncertainty: Firm-level evidence (2020)
Working Paper: Cross-border Investments and Uncertainty: Firm-level Evidence (2020)
Working Paper: Cross-border Investments and Uncertainty Firm-level Evidence (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-02877942
Access Statistics for this paper
More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().