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Publication . Article . 2018

The Micro Origins of International Business-Cycle Comovement

Julian di Giovanni; Andrei A. Levchenko; Isabelle Mejean;
Open Access
Published: 01 Jan 2018 Journal: American Economic Review (issn: 0002-8282, Copyright policy )
Abstract

Di Giovanni gratefully acknowledges the European Research Council (ERC) under the European Union’s Horizon 2020 research and innovation programme (grant agreement no. 726168), and the Spanish Ministry of Economy and Competitiveness, through the Severo Ochoa Programme for Centres of Excellence in R&D (SEV-2015-0563) for financial support. Mejean gratefully acknowledges support from a public grant overseen by the French National Research Agency (ANR) as part of the “Investissements d’Avenir” program (Idex grant agreement ANR-11-IDEX-0003- 02/Labex ECODEC ANR-11-LABEX-0047 and Equipex reference: ANR-10-EQPX-17, Centre d’accès sécurisé aux données (CASD)), and the European Research Council (ERC) under the European Union’s Horizon 2020 research and innovation programme (grant agreement no. 714597).

This paper investigates the role of individual firms in international business-cycle comovement using data covering the universe of French firm-level value added and international linkages over the period 1993–2007. At the micro level, trade and multinational linkages with a particular foreign country are associated with a significantly higher correlation between a firm and that foreign country. The impact of direct linkages on comovement at the micro level has significant macro implications. Without those linkages the correlation between France and foreign countries would fall by about 0.098, or one-third of the observed average correlation of 0.291 in our sample of partner countries.

Subjects by Vocabulary

Microsoft Academic Graph classification: International business Economic geography Economics

Subjects

[QFIN]Quantitative Finance [q-fin], Economics and Econometrics

Funded by
EC| GLOBALMACRO
Project
GLOBALMACRO
Global Production Networks and Macroeconomic Interdependence
  • Funder: European Commission (EC)
  • Project Code: 726168
  • Funding stream: H2020 | ERC | ERC-COG
Validated by funder
,
ANR| IPS
Project
IPS
Idex Paris-Saclay
  • Funder: French National Research Agency (ANR) (ANR)
  • Project Code: ANR-11-IDEX-0003
,
EC| TRADENET
Project
TRADENET
Firm-to-Firm Trade Networks
  • Funder: European Commission (EC)
  • Project Code: 714597
  • Funding stream: H2020 | ERC | ERC-STG
Related to Research communities
Social Science and Humanities
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