Financial Constraints and Growth: Multinational and Local Firm Responses to Currency Depreciations

• 成果类型: Article
• 署名作者: Desai, Mihir A.; Foley, C. Fritz; Forbes, Kristin J.
• 署名单位: Harvard University; National Bureau of Economic Research; Massachusetts Institute of Technology (MIT)
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhm017
• 发表日期: 2008
• 页码: 2857
• 关键词: FOREIGN DIRECT-INVESTMENT; cash flow sensitivities; corporate governance; capital structure; exchange-rates; debt; RISK; exposure; leverage; size

摘要

This article examines how financial constraints and product market exposures determine the response of multinational and local firms to sharp depreciations. U. S. multinational affiliates increase sales, assets, and investment significantly more than local firms during, and subsequent to, depreciations. Differing product market exposures do not explain these differences in performance. Instead, a differential ability to circumvent financial constraints is a significant determinant of the observed differences in investment responses. Multinational affiliates also access parent equity when local firms are most constrained. These results indicate another role for foreign direct investment in emerging markets-multinational affiliates expand economic activity during currency crises when local firms are most constrained.