Liquidity Constraints and Linkages with Multinationals

Arbeitspapier

Using a unique data set from the Czech Republic for 1994-2003, this study examines the relationship between a firm's liquidity constraints and its supply linkages with multinational corporations (MNCs). The empirical analysis indicates that Czech firms supplying MNCs are less credit constrained than non-suppliers. A closer inspection of the timing of the effect, however, suggests that this result is due to less constrained firms self-selecting into becoming MNC suppliers rather than the benefits derived from the supplying relationship. As recent literature finds that productivity spillovers from foreign direct investment (FDI) are most likely to take place through contacts between MNCs and their local suppliers, our finding suggests that well-developed financial markets may be needed in order to take full advantage of the benefits associated with FDI inflows.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: LICOS Discussion Paper ; No. 225

Classification and Topics

• Classification: Wirtschaft ; International Investment; Long-term Capital Movements ; Multinational Firms; International Business ; Financial Aspects of Economic Integration
• Subject: foreign direct investment ; cash flow ; liquidity constraints ; Unternehmenskooperation ; Direktinvestition ; Multinationales Unternehmen ; Betriebliche Liquidität ; Verschuldungsrestriktion ; Produktivität ; Spillover-Effekt ; Tschechische Republik

Contributors, Location and Time

• Event: Geistige Schöpfung
• (who): Javorcik, Beata S. ; Spatareanu, Mariana
• Event: Veröffentlichung
• (who): Katholieke Universiteit Leuven, LICOS Centre for Institutions and Economic Performance
• (where): Leuven
• (when): 2008

Further information

• Handle: http://hdl.handle.net/10419/74981
• Last update: 20.09.2024, 8:25 AM CEST