Liquidity Constraints and Firms' Linkages with Multinationals
AbstractUsing a unique data set on the Czech Republic for 1994--2003, this article examines the relationship between a firm's liquidity constraints and its supply linkages with multinational corporations (MNCs). The empirical analysis indicates that Czech firms supplying multinationals are less credit constrained than are nonsuppliers. Closer inspection of the timing of the effect, however, suggests that the result is due to self-selection of less constrained firms into supplying multinationals rather than to the benefits derived from the supplying relationship. As the recent literature finds that productivity spillovers from foreign direct investment (FDI) are most likely to take place through contacts between MNCs and their local suppliers, this finding suggests that well-developed financial markets may be needed to take full advantage of the benefits associated with FDI inflows. Copyright The Author 2009. Published by Oxford University Press on behalf of the International Bank for Reconstruction and Development / the world bank . All rights reserved. For permissions, please e-mail: email@example.com, Oxford University Press.
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Bibliographic InfoArticle provided by World Bank Group in its journal The World Bank Economic Review.
Volume (Year): 23 (2009)
Issue (Month): 2 (June)
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- MAYNERIS, Florian, 2011.
"A new perspective on the firm size-growth relationship: shape of profits, investment and heterogeneous credit constraints,"
CORE Discussion Papers
2011062, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Florian MAYNERIS, 2011. "A new perspective on the firm size-growth relationship: Shape of profits, investment and heterogeneous credit constraints," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2011044, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
- Kersting, Erasmus K. & Gorg, Holger, 2014.
"Vertical integration and supplier finance,"
Globalization and Monetary Policy Institute Working Paper
168, Federal Reserve Bank of Dallas.
- Havranek, Tomas & Irsova, Zuzana, 2011. "Estimating vertical spillovers from FDI: Why results vary and what the true effect is," Journal of International Economics, Elsevier, vol. 85(2), pages 234-244.
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