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Multinationales as stabilizers? Economic crisis, access to finance, and employment growth

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  • Álvarez, Roberto
  • Görg, Holger

Abstract

This paper examines the comparative response of multinationals and domestic firms to an economic crisis, using the empirical setting of a well defined case of economic slowdown in Chile. We find that employment in manufacturing plants has been drastically reduced during the economic crisis. Our findings reveal that multinationals are more likely to exit contributing to the employment contraction during the crisis, but surviving foreign firms experience lower employment reductions than domestic enterprises. These results are not fully consistent with idea that multinationals are less affected by an economic crisis and that they may be able to act as stabilizers.

Suggested Citation

  • Álvarez, Roberto & Görg, Holger, 2011. "Multinationales as stabilizers? Economic crisis, access to finance, and employment growth," Kiel Working Papers 1698, Kiel Institute for the World Economy (IfW Kiel).
  • Handle: RePEc:zbw:ifwkwp:1698
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    References listed on IDEAS

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    2. Spaliara, Marina-Eliza & Tsoukas, Serafeim, 2013. "What matters for corporate failures in Asia? Exploring the role of firm-specific characteristics during the Asian crisis," Structural Change and Economic Dynamics, Elsevier, vol. 26(C), pages 83-96.

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    More about this item

    Keywords

    Multinationals; employment growth; plant survival; economic crisis;
    All these keywords.

    JEL classification:

    • F2 - International Economics - - International Factor Movements and International Business
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor

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