China and Global Development Seminar Series
Institute for China and Global Development
Firm Exports and Multinational Activity
under Credit Constraints
by Prof. Kalina Manova
September 9, 2011 (Friday)
4:30 p.m. to 6:00 p.m.
Room 910, KKL Building
The University of Hong Kong
Pokfulam Road, Hong Kong
To view Prof. Kalina Manova's presentation slides, please click here.
Remarks: Non-HKU staff/students who are interested in attending this seminar, please register with Ms. Angelina Hung by sending your full name, affiliation and contact details to firstname.lastname@example.org. For enquiries, please call 2547 8472.
provides firm-level evidence that credit constraints restrict international
trade flows and affect the pattern of foreign direct investment. Using
detailed data from China, we show that foreign-owned affiliates and joint
ventures have better export performance than private domestic firms, and
that this advantage is systematically greater in sectors at higher levels of
financial vulnerability measured in a variety of ways. These patterns are
manifest in firms' export sales, export product scope and number of export
destinations. They are also more pronounced when firms face higher trade
costs. This evidence indicates that limited credit availability hinders
firms' trade flows, and is consistent with foreign affiliates being less
constrained because they can access additional funding from their parent
company. Our results further imply that financial frictions and host-country
financial institutions affect the sectoral and spatial composition of MNC
activity. More broadly, our findings suggest that FDI can compensate for
domestic financial market imperfections and alleviate their impact on
aggregate growth, trade and private sector development.
About the Speaker
Kalina Manova is
an Assistant Professor of Economics at Stanford University. She is also a
Faculty Research Fellow at the National Bureau of Economic Research and a
CESifo Institute affiliate. She received her Ph.D. from Harvard University
in 2007 and her A.B. from Harvard College in 2002. In 2009-2010, she was a
Visiting Assistant Professor of Economics at Princeton University as a Kenen
Fellow in International Economics. Her research examines the consequences of
credit constraints and underdeveloped financial markets for growth,
international trade and multinational activity; the implications of equity
market liberalizations and financial crises for cross-country trade flows;
the importance of product quality for firmsˇ¦ export success; and the effects
of outsourcing on sending economies.