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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 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, 2017. "The Micro Origins of International Business Cycle Comovement," Working Papers 981, Barcelona Graduate School of Economics.
  • Handle: RePEc:bge:wpaper:981
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    References listed on IDEAS

    as
    1. Vasco Carvalho, 2007. "Aggregate fluctuations and the network structure of intersectoral trade," Economics Working Papers 1206, Department of Economics and Business, Universitat Pompeu Fabra, revised Oct 2010.
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    3. Javier Cravino & Andrei A. Levchenko, 2017. "Multinational Firms and International Business Cycle Transmission," The Quarterly Journal of Economics, Oxford University Press, vol. 132(2), pages 921-962.
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    Citations

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    Cited by:

    1. Vasco M. CARVALHO & NIREI Makoto & SAITO Yukiko, 2014. "Supply Chain Disruptions: Evidence from the Great East Japan Earthquake," Discussion papers 14035, Research Institute of Economy, Trade and Industry (RIETI).
    2. Ernesto Pasten & Raphael S. Schoenle & Michael Weber, 2018. "Price Rigidity and the Origins af Aggregate Fluctuations," CESifo Working Paper Series 7190, CESifo Group Munich.
    3. Carvalho, V. M & Tahbaz-Salehi, A., 2018. "Production Networks: A Primer," Cambridge Working Papers in Economics 1856, Faculty of Economics, University of Cambridge.
    4. Ruediger Bachmann & Gabriel Ehrlich & Dimitrije Ruzic, 2017. "Firms and Collective Reputation: The Volkswagen Emission Scandal as a Case Study," CESifo Working Paper Series 6805, CESifo Group Munich.
    5. 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.
    6. repec:wiw:wiwwuw:wuwp257 is not listed on IDEAS
    7. Anja Kukuvec & Harald Oberhofer, 2018. "The Propagation of Business Sentiment within the European Union?," WIFO Working Papers 549, WIFO.
    8. 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.
    9. 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.
    10. repec:wiw:wus005:6003 is not listed on IDEAS
    11. repec:eee:ecolet:v:163:y:2018:i:c:p:95-97 is not listed on IDEAS
    12. 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

    Keywords

    comovement; international trade; firm-level shocks; large firms;

    JEL classification:

    • F44 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Business Cycles
    • F61 - International Economics - - Economic Impacts of Globalization - - - Microeconomic Impacts
    • F62 - International Economics - - Economic Impacts of Globalization - - - Macroeconomic Impacts

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