Institutions and Market Creation: Evidence from the Experience of Transition Countries
36 Pages Posted: 2 Oct 2013
Date Written: October 1, 2013
This paper proposes an empirical analysis for asessing the extent to which multinational firms can effectively support market creation strategies. Our setting focuses on the transition countries, namely ex-socialist countries. Focusing on the lending policy of the European Bank for Reconstruction and Development (EBRD), we build an original database by organizing the public records of the credit contracts signed by the EBRD. Our empirical strategy is able to disentangle that the credit selection that favored the entry of foreign multinational corporations into these countries served as one of the pillars for consolidating their transition to the market economy.
Keywords: Investments, Multinational firms, Transition Economies
JEL Classification: F20, F63, P33, P33
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