We study how foreign financial developments influence the conditional distribution of domestic GDP growth. Within a quantile regression setup, we propose a method to parsimoniously account for foreign vulnerabilities using bilateral-exposure weights when assessing downside macroeconomic risks....

The exceptional export performance of foreign-owned firms is a well-established stylized fact, but the underlying mechanism is not yet fully understood. In this paper, we provide theory and empirical evidence demonstrating that this fact can be explained by ownership differences in access to...

The U.S. Bureau of Economic Analysis (BEA) estimates the return on investments of foreign subsidiaries of U.S. multinational companies over the period 1982-2006 averaged 9.4 percent annually after taxes; U.S. subsidiaries of foreign multinationals averaged only 3.2 percent. Two factors distort...

This paper provides a selective survey of the literature on home country effects of FDI, and points to some new questions regarding the impact of outward FDI on economic structure in the home country. Much of the existing literature on production interactions between the domestic and foreign...

Recent efforts by international trade economics have led to the integration of the theory of the multinational enterprise into the theory of international trade. This is both an exciting and an important development. Prior to the last decade or so, analysis of the MNE was largely distinct from...

We study the consequences of offshoring for international equity portfolios, risk sharing, and the international transmission of technology and government spending shocks. We show analytically that serving foreign markets by producing locally can substitute for international asset trade and...

I study the aggregate implications of the entry of Multinational Firms (MNFs) in a two country Dynamic Stochastic General Equilibrium model in which firms have heterogeneous productivity in the sense of Ghironi and Melitz (2005). Unlike the extant open economy macroeconomics literature, this...

This paper examines how nominal uncertainty affects the choice firms face to serve a foreign market through exports or to produce abroad as a multinational. I develop a two-country, stochastic general equilibrium model in which firms make production and pricing decisions in advance, and I...