Sandra Lancheros

Global Engagement and Returns Volatility

This paper finds that a greater reliance on foreign market sales increases the volatility of firms’ stock returns, using high-frequency data for publicly listed Japanese manufacturing firms over the period 2000–10. The two margins of global engagement we consider, namely, exports and sales via foreign affiliates (horizontal foreign direct investment), have both a positive and economically significant effect on firm-level volatility. We find, however, that increasing the intensity of sales through foreign affiliates has a stronger effect on volatility than a similar change in export intensity. We also uncover evidence consistent with the notion that firms’ need to use external finance to cover the substantial costs involved in reaching foreign consumers can be an important channel through which firms’ participation in international markets increases their exposure to economic uncertainty.

Exports, Outward FDI and Technology Upgrading: Firm Level Evidence from India

Abstract This paper evaluates the individual and combined effects of exporting and outward foreign direct investments (OFDI) on firms’ technology investments at home using firm-level data from the pharmaceutical industry in India. The analysis accounts for unobserved firm heterogeneity and the endogeneity of the choice of foreign market participation, and shows that exporting has been an important channel through which Indian multinational expansion has encouraged greater domestic technological activity. However, all else constant, higher levels of OFDI have rather acted as substitutes for such technological efforts.

Drivers of Technology Upgrading: Do Foreign Acquisitions Matter to Chinese Firms?

Technology upgrading is a key element of industrialization in developing countries while technology transfer through trade and FDI has for a long time been regarded as a major engine of technolog)? upgrading, in recent years there has been a renewed emphasis on indigenous innovations as a means for building technology capabilities in developing countries. Many developing countries joined the competition for attracting FDI in the expectation that advanced technological and managerial knowledge embedded in FDI can buildup technological capabilities in their country and drive technological upgrading in these economies. However the question is whether developing countries can rely on foreign technology to catch up with industrialized countries and whether foreign acquisition is one of the major drivers of technology upgrading in developing countries. China is a good example for investigating this question.