Tracing the International Transmission of a Crisis Through Multinational Firms / Marcus Biermann, Kilian Huber.

Format:

Book

Author/Creator:

Biermann, Marcus.

Contributor:

National Bureau of Economic Research.

Huber, Kilian.

Series:

Working Paper Series (National Bureau of Economic Research) no. w31061.

NBER working paper series no. w31061

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2023.

Summary:

We show that multinational firms transmit shocks across countries through their internal capital markets. We study a credit supply shock to parent firms in Germany. International affiliates outside Germany supported their parents through internal lending, became financially constrained themselves, and experienced lower real growth. We find that managers were "Darwinist" with respect to international affiliates but "Socialist" in the home country, that internal capital markets transmitted the credit shock more strongly than a non-financial shock, and that access to developed credit markets attenuated the real effects. The total real impact of shock transmission through multinationals on foreign economies was large.

Notes:

Print version record

March 2023.