Surviving the Global Financial Crisis: Foreign Ownership and Establishment Performance

By Laura Alfaro, M. Chen. 2011

227 citations recorded by the source corpus.

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.

Subfields: Accounting, Economics and Econometrics, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/cf5d4c4b120004d5b38327a5307bd83a2558ea10

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Accounting

In Economics and Econometrics

In Strategy and Management

Citations in the corpus

Multinational banks and the global financial crisis: Weathering the perfect storm? (2014, background): “Alfaro and Chen (2012) compare a global data set of nonbank multinational subsidiaries and domestic firms, and conclude that multinational subsidiaries performed better during the Great Recession.”
Temperature Shocks and Establishment Sales (2020, background): “For example, Alfaro and Chen (2012) examine the moderating effect of foreign ownership on establishment sales following the 2008 financial crisis.”
Political Economy of Foreign Direct Investment: Globalized Production in the Twenty-First Century (2016, background): “Alternatively, export-oriented investments could hedge against labor demand volatility by distributing risk across more markets (Alfaro & Chen 2012).”
FDI and Economic Growth in Central and Eastern Europe (2014, background): “The influence of FDI varies with production connections between foreign establishments and head offices and the magnitude of financial restrictions [5].”
Firm Exports and Multinational Activity Under Credit Constraints (2011, unknown): “Foreign-owned firms also fared better during the recent financial crisis relative to local establishments (Alfaro & Chen, 2012).”