Newtoning financial development with heterogeneous firms

Abstract: This article theoretically and empirically tests the link between financial constraints and the extensive (proportion of exporters) and intensive (volume of exports) margins of international trade. The article's main contribution is its macroeconomic analysis of this relationship, which is further reaching than the sector-based focus found in the current literature. It also presents new information on firm behavior under financial constraints. The paper develops a trade model with heterogeneous firms and shows that countries with a high level of financial development have a lower productivity cut-off above which firms export and a higher proportion of exporting firms. Nevertheless, financial development is not correlated with firms' export volumes once they become exporters. An empirical analysis is developed on the basis of an international trade database on 135 countries between 1994 and 2007. The empirical analysis estimates a two-step gravity equation using panel data and confirms the first theoretical proposition that finance has a positive impact on the extensive margin. However, the intensive margin results are striking. They find a negative relationship between financial development and trade flows, confirmed by all the sensitivity tests. Despite the positive effect of financial development found by the literature in some economic sectors, the macroeconomic impact on overall exports was negative during the analyzed period

L'intégration économique entre l'Allemagne et les pays d'Europe centrale

National audienc

Les enjeux economiques allemands, programmes electoraux, campagne et grande coalition

National audienc

« Foreign direct R&D investment in Central Europe: where do we stand? » Foreign direct R&D investment in Central Europe: where do we stand?

Abstract This article questions the nature of the foreign direct R&D investments in Central Europe. Do the affiliates of the multinationals still undertake adaptive R&D? Have they recently engaged in innovative R&D activities in their Central European affiliates? We assess the nature of the R&D activities of the multinationals in Central Europe in three steps. In a first step we use the OECD database on foreign direct R&D expenditure and personnel to compare the foreign affiliates' R&D intensity with the indigenous firms' R&D intensity. We find few differences between the two families of firms. In a second step we use patents granted to foreigners in Central Europe as a variable proxy to assess the evolution of innovative R&D activities in Central Europe. We find that the patenting activities of foreigners rose with the increase of their R&D investments in Central Europe. We also suggest that the Central European affiliates still have a marginal position in the patenting strategy of the multinationals. In a third step we focus on the patent data of the foreign affiliates in the Czech Republic -the Central European leader as regards of foreign direct R&D investments -, in the major foreign direct R&D sectors -electronics, electrical equipment, machinery and motor vehicles -. We build a sample made of the ten multinationals representing the most active R&D investors in the country and assess the recent evolution of their patenting activity. We suggest that, (a) even these major R&D investors still only marginally apply for patents in their Czech affiliates; (b) there is no under-evaluation of the innovation activity of the Czech affiliates due to a geographical separation of inventions -in the Czech Republic -and patent location -in Western Europe; (c) the researchers working in the Czech affiliates are still not sufficiently oriented towards innovation activities to be integrated in the patenting-oriented international teams built by the multinationals. Foreign direct R&D investments in Central Europe remain mostly production supportive and associated with the international exploitation of technology produced in the Western headquarters and affiliates. Despite the strong engagement of the Czech government towards foreign direct R&D, real innovative R&D increases very slowly

Export-Oriented Multinationals and the Quality of International Specialisation in Central European Countries

International audienc

Concurrence bancaire et " transition financière " dans les pays d’Europe centrale : l’apport des banques étrangères

Rugraff Eric. Concurrence bancaire et " transition financière " dans les pays d’Europe centrale : l’apport des banques étrangères. In: Revue d'économie financière, n°55, 1999. L'Europe financière. Les finances du sport. Innovations bancaires. pp. 113-134