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Multinationals Here and There: Affiliates' Response to Global Crises

Author

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  • Constance Marette
  • Camilo Umana Dajud
  • Vincent Vicard

Abstract

This paper investigates how multinational enterprises (MNEs) adapted their global operations in the post COVID-19 period. Using the pandemic as a natural experiment, we analyze how MNEs adjusted employment across their foreign and domestic affiliates in response to economic disruptions and shifting perceptions. Leveraging a crosscountry, firm-level dataset, we employ a difference-in-differences approach among treated groups to assess the causal differential response of MNEs relative to domestic firms. MNEs outperformed domestic firms following the pandemic, driven primarily by the stronger performance of their domestic affiliates. We also find evidence of home bias in adjustments within MNEs: employment growth was significantly higher in domestic affiliates than in foreign ones. These patterns intensified through 2022, suggesting persistent shifts in MNE strategies.

Suggested Citation

  • Constance Marette & Camilo Umana Dajud & Vincent Vicard, 2025. "Multinationals Here and There: Affiliates' Response to Global Crises," Working Papers 2025-10, CEPII research center.
    • Handle: RePEc:cii:cepidt:2025-10
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    References listed on IDEAS

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    5. Augustin Landier & Vinay B. Nair & Julie Wulf, 2009. "Trade-offs in Staying Close: Corporate Decision Making and Geographic Dispersion," The Review of Financial Studies, Society for Financial Studies, vol. 22(3), pages 1119-1148.
    6. Pierre Blanchard & Emmanuel Dhyne & Catherine Fuss & Claude Mathieu, 2016. "(Not So) Easy Come, (Still) Easy Go? Footloose Multinationals Revisited," The World Economy, Wiley Blackwell, vol. 39(5), pages 679-707, May.
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    Cited by:

    1. Joyez, Charlie, 2025. "Robustness with adaptation. Ownership networks of multinationals through COVID-19," Network Science, Cambridge University Press, vol. 13, pages 1-1, January.

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    Keywords

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    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F61 - International Economics - - Economic Impacts of Globalization - - - Microeconomic Impacts
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure

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