KCG Working Papers

KCG Working Paper No.17: Friends like this: The Impact of the US – China Trade War on Global Value Chains

8th August 2019

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Authors: Haiou Mao and Holger Görg

This paper considers the indirect impact the recent tariff increases between the US and China can have in third countries through links in global supply chains. We combine data from input-output relationships, imports and tariffs[…]

KCG Working Paper No.16: Foreign Direct Investment & Petty Corruption in Sub-Saharan Africa: An Empirical Analysis at the Local Level

11th July 2019

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Authors: Julian Donaubauer, Peter Kannen and Frauke Steglich

Inspired by a recent and ongoing debate about whether foreign direct investment (FDI) represents a blessing for or an impediment to economic, social, and political development in FDI host countries this paper addresses two issues[…]

KCG Working Paper No.15: Environmental Policy and Firm Selection in the Open Economy

9th July 2019

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Authors: Udo Kreickemeier and Philipp M. Richter

In this paper, we analyse the effects of a unilateral change in an emissions tax in a model of international trade with heterogeneous firms. We find a positive effect of tighter environmental policy on average productivity in the[…]

KCG Working Paper No.14: Strategic Environmental Policy and the Mobility of Firms

18th April 2019

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Authors: Philipp M. Richter, Marco Runkel and Robert C. Schmidt

The loss of international competitiveness of domestic industries remains a key obstacle to the implementation of effective carbon prices in a world without harmonized climate policies[…]

KCG Working Paper No.13: The Role of FDI in Structural Change: Evidence from Mexico

11th October 2018

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Authors: Octavio Escobar and Henning Mühlen

Foreign direct investment (FDI) flows to Mexico are substantial and play an important role in the Mexican economy since the mid‐1990s. These investments reflect the activities of
multinational firms that shape to some extent the[…]

KCG Working Paper No.12: International Trade and Retail Market Performance and Structure: Theory and Empirical Evidence

14th June 2018

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Authors: Philipp Meinen and Horst Raff

Based on a theoretical model featuring heterogeneous retailers that may source globally and operate as chains, we derive a number of hypotheses that link trade integration to retail firm performance and to the structure of retail markets. We empirically test these predictions using Danish microdata for the period 1999 to 2008. We find that importing retailers are larger, more profitable[…]

KCG Working Paper No.11: Employment Protection and Firm Relocation: Theory and Evidence

17th April 2018

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Authors: Gerda Dewit, Holger Görg and Yama Temouri

We examine the determinants of the decision to relocate activities abroad for firms located in OECD countries. We argue that particular firm-specific features play a crucial role for the link between employment protection and relocation[…]

KCG Working Paper No.10: Financial Frictions and Foreign Direct Investment: Evidence from Japanese Microdata

16th March 2018

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Authors: Horst Raff, Michael Ryan and Frank Stähler

Using Japanese microdata for the period 1980 to 2000 we find evidence for two transmission channels from financial shocks to foreign direct investment: a collateral channel, whereby changes in the value of investors’ landholdings affect their borrowing ability; and a lending channel, whereby changes in bank health affect banks’ lending ability. Decreasing land values[…]

KCG Working Paper No. 9: Markups of Exporters and Importers: Evidence from Hungary

8th March 2018

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Authors: Cecilia Hornok and Balázs Muraközy

This paper studies the relationship between firm-level markups and trade status using balance sheet information linked to detailed trade data from Hungary between 1995-2003. We find that importing is strongly positively correlated with markups both across and within firms. We argue that this correlation can reflect three channels: self-selection, higher physical productivity resulting from access to a larger variety of inputs and quality upgrading based on high-quality imported intermediate inputs[…]

KCG Working Paper No.8: How Global is FDI? Evidence from the Analysis of Theil Indices

31st December 2017

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Authors: Frank Bickenbach, Wan-Hsin Liu and Peter Nunnenkamp

It is open to question whether the intensified worldwide competition for FDI has reduced its traditionally strong concentration in a few large and relatively advanced host countries We calculate and decompose Theil indices to track changes in absolute and relative concentration of FDI during the period 1970-2013[…]