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The Micro Origins of International Business-Cycle Comovement

Author

Listed:
  • Julian di Giovanni
  • Andrei A. Levchenko
  • Isabelle Mejean

Abstract

This paper investigates the role of individual firms in international business-cycle comovement using data covering the universe of French firm-level value added and international linkages over the period 1993–2007. At the micro level, trade and multinational linkages with a particular foreign country are associated with a significantly higher correlation between a firm and that foreign country. The impact of direct linkages on comovement at the micro level has significant macro implications. Without those linkages the correlation between France and foreign countries would fall by about 0.098, or one-third of the observed average correlation of 0.291 in our sample of partner countries.

Suggested Citation

  • Julian di Giovanni & Andrei A. Levchenko & Isabelle Mejean, 2018. "The Micro Origins of International Business-Cycle Comovement," American Economic Review, American Economic Association, vol. 108(1), pages 82-108, January.
  • Handle: RePEc:aea:aecrev:v:108:y:2018:i:1:p:82-108
    Note: DOI: 10.1257/aer.20160091
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Yukiko Saito & Makoto Nirei & Vasco Carvalho, 2014. "Supply Chain Disruptions: Evidence from Great East Japan Earthquake," 2014 Meeting Papers 595, Society for Economic Dynamics.
    2. Ruediger Bachmann & Gabriel Ehrlich & Ying Fan & Dimitrije Ruzic, 2017. "Firms and Collective Reputation: A Study of the Volkswagen Emissions Scandal," CESifo Working Paper Series 6805, CESifo Group Munich.
    3. repec:eee:jcecon:v:46:y:2018:i:4:p:1178-1193 is not listed on IDEAS
    4. Ernesto Pasten & Raphael Schoenle & Michael Weber, 2017. "Price Rigidity and the Origins of Aggregate Fluctuations," NBER Working Papers 23750, National Bureau of Economic Research, Inc.
    5. Carvalho, Vasco M & Tahbaz-Salehi, Alireza, 2018. "Production Networks: A Primer," CEPR Discussion Papers 13421, C.E.P.R. Discussion Papers.
    6. Imbs, Jean & Pauwels, Laurent, 2019. "Fundamental Moments," CEPR Discussion Papers 13662, C.E.P.R. Discussion Papers.
    7. Maria Bas & Pamela Bombarda & Sébastien Jean & Gianluca Orefice, 2018. "Firms' Exports, Volatility and Skills: Evidence from France," Working Papers 2018-20, CEPII research center.
    8. Bachmann, R�diger & Ehrlich, Gabriel & Ruzic, Dimitrije, 2017. "Firms and Collective Reputation: the Volkswagen Emissions Scandal as a Case Study," CEPR Discussion Papers 12504, C.E.P.R. Discussion Papers.
    9. Ernesto Pasten & Raphael S. Schoenle & Michael Weber, 2017. "Price Rigidities and the Granular Origins of Aggregate Fluctuations," CESifo Working Paper Series 6619, CESifo Group Munich.
    10. Laura Alfaro & Enrique Moral-Benito & Manuel Garcia-Santana, 2018. "On the Direct and Indirect Real Effects of Credit Supply Shocks," 2018 Meeting Papers 39, Society for Economic Dynamics.
    11. Anja Kukuvec & Harald Oberhofer, 2018. "The Propagation of Business Sentiment within the European Union?," WIFO Working Papers 549, WIFO.
    12. Héricourt, Jérôme & Nedoncelle, Clément, 2018. "Multi-destination firms and the impact of exchange-rate risk on trade," Journal of Comparative Economics, Elsevier, vol. 46(4), pages 1178-1193.
    13. repec:eee:ecolet:v:163:y:2018:i:c:p:95-97 is not listed on IDEAS
    14. Ingvild Almås & Anders Kjelsrud, 2016. "Pro-poor Price Trends and Inequality - The Case of India," CESifo Working Paper Series 5740, CESifo Group Munich.

    More about this item

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F44 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Business Cycles
    • F62 - International Economics - - Economic Impacts of Globalization - - - Macroeconomic Impacts
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation

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