Surviving the global financial crisis: foreign ownership and establishment performance

Laura Alfaro and Maggie Chen

No 5946, Policy Research Working Paper Series from The World Bank

Abstract: 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.

Keywords: Economic Theory&Research; Investment and Investment Climate; Bankruptcy and Resolution of Financial Distress; Emerging Markets; Economic Conditions and Volatility (search for similar items in EconPapers)
Date: 2012-01-01
New Economics Papers: this item is included in nep-ifn
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Citations: View citations in EconPapers (146)

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Related works:
Journal Article: Surviving the Global Financial Crisis: Foreign Ownership and Establishment Performance (2012)
Working Paper: Surviving the Global Financial Crisis: Foreign Ownership and Establishment Performance (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:wbk:wbrwps:5946

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