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- handle: 10670/1.hqpr3h
- hal: hal-02877942
- doi: 10.1016/j.jimonfin.2020.102159
- PII: S0261-5606(20)30099-1
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info:eu-repo/semantics/altIdentifier/doi/10.1016/j.jimonfin.2020.102159
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Rafael Cezar et al., « Cross-border investments and uncertainty: Firm-level evidence », HAL-SHS : économie et finance, ID : 10.1016/j.jimonfin.2020.102159
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Résumé
This paper studies the impact of uncertainty on cross-border investments. We build a data-set of firm-level outward Foreign Direct Investments between 2000 and 2015. We create a time and country varying measure of uncertainty based on the dispersion of idiosyncratic investment returns. An increase in uncertainty delays cross-border flows to the affected country. Yet, this average effect hides strong heterogeneity. Firms with low ex-ante performance durably reduce their foreign investments. Meanwhile high-performing firms increase their investments after the initial shock. We interpret these results as the evidence of a cleansing effect of uncertainty shocks among multinational firms in the presence of financial frictions. © 2020