Surviving the Global Financial Crisis: Foreign Ownership and Establishment Performance

34 Pages Posted: 20 Jun 2011 Last revised: 3 May 2021

See all articles by Laura Alfaro

Laura Alfaro

Harvard University

Maggie Xiaoyang Chen

George Washington University

Multiple version iconThere are 2 versions of this paper

Date Written: June 2011

Abstract

We examine the differential response of establishments to the recent global financial crisis with particular emphasis on the role of foreign ownership. Using a worldwide establishment panel dataset, we investigate how multinational subsidiaries around the world responded to the crisis relative to local establishments. We find that, first, multinational subsidiaries fared on average better than local counterfactuals with similar economic characteristics. Second, among multinational subsidiaries, establishments sharing stronger vertical production and financial linkages with parents exhibited greater resilience. Finally, in contrast to the crisis period, the effect of foreign ownership and linkages on establishment performance was insignificant in non-crisis years.

Suggested Citation

Alfaro, Laura and Chen, Maggie Xiaoyang, Surviving the Global Financial Crisis: Foreign Ownership and Establishment Performance (June 2011). NBER Working Paper No. w17141, Available at SSRN: https://ssrn.com/abstract=1866100

Laura Alfaro (Contact Author)

Harvard University ( email )

Cambridge, MA 02138
United States

Maggie Xiaoyang Chen

George Washington University ( email )

710 21st Street NW
Washington, DC 20052
United States

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