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Keywords:International business enterprises 

The exchange rate and overseas profits of U.S. multinationals

Research Paper , Paper 9405

Working Paper
How does multinational production change international comovement?

I study the aggregate implications of the entry of Multinational Firms (MNFs) in a two country Dynamic Stochastic General Equilibrium model in which firms have heterogeneous productivity in the sense of Ghironi and Melitz (2005). Unlike the extant open economy macroeconomics literature, this model endogenizes both multinational production and exports as possible strategies of internationalization of production, a feature that substantially improves the match between model-simulated moments and business cycle data along two dimensions. First, once I allow for concurrent entry (and exit) of ...
Working Papers , Paper 2010-041

Journal Article
Intra-firm trade: an update

New England Economic Review , Issue May , Pages 46-51

Working Paper
Risk, returns, and multinational production

This paper starts by unveiling a new empirical regularity: multinational corporations systematically tend to exhibit higher stock market returns and earnings yields than non-multinational firms. Within non-multinationals, exporters tend to exhibit higher earnings yields and returns than firms selling only in their domestic market. To explain this pattern, we develop a real option value model where firms are heterogeneous in productivity, and have to decide whether and how to sell in a foreign market where demand is risky. Firms can serve the foreign market through trade or foreign direct ...
Supervisory Research and Analysis Working Papers , Paper QAU10-5

Working Paper
Interactions between domestic and foreign investment

This paper studies both the domestic and foreign fixed investment expenditures of a sample of U. S. multinational firms. In addition to explaining empirically each type of investment, an important goal is to determine whether there are significant interactions between expenditures in the different locations. ; Two types of interaction--one, financial, and the other, production-based--are explored theoretically and empirically. The financial interaction is the result of a model which assumes a risk of bankruptcy and its associated costs; under these circumstances, the firm faces an increasing ...
International Finance Discussion Papers , Paper 329

Working Paper
Does multinationality matter? Evidence of value destruction in U.S. multinational corporations

We document that capital markets penalize corporate multinationality by putting a lower value on the equity of multinational corporations than on otherwise similar domestic corporations. Using Tobin's q, the multinational discount is estimated to be in the range of 8.6% to 17.1%. The most important mechanism of value destruction is an asset channel in which multinationals have disproportionately high levels of assets in relation to the earnings they generate. Foreign assets are particularly associated with value destruction. In contrast, exporting from U.S. operations is associated with an ...
Finance and Economics Discussion Series , Paper 2000-21

Journal Article
Flexible exchange rates, multinational corporations, and accounting standards

Economic Review , Issue Fall , Pages 44-55

Working Paper
The contribution of multinational corporations to U.S. productivity growth, 1977-2000

In this paper, we decompose aggregate labor productivity growth in order to gauge the relative importance of multinational corporations (MNCs) to the economic performance of the United States in the 1990s. As we define it, the MNC sector refers to the U.S. activities of multinational corporations operating in the United States. We develop productivity estimates for MNCs using (1) published and unpublished industry-level data from two surveys conducted by the Bureau of Economic Analysis and (2) productivity data for industries and major sectors from the FRB productivity system (Bartelsman and ...
Finance and Economics Discussion Series , Paper 2007-21

Working Paper
Exchange rate pass-through and the role of international distribution channels

Manufacturers selling in foreign markets often do not completely pass on the effects of fluctuations in exchange rates to the prices of their products. Our paper addresses this puzzle and studies the effects of the international distribution channel on exchange rate pass-through. We develop an exchange rate pass-through model that takes into account the role of an intermediary between a domestic manufacturer and its consumers in a foreign market. We find that the magnitude of the pass-through depends on the presence of an incentive problem in the distribution channel. When there is no ...
FRB Atlanta Working Paper , Paper 96-22


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