Farid Toubal Research Working Papers/Data Teaching cv
 

Publications
     
 

Ronald B. Davies, Julien Martin, Mathieu Parenti, and Farid Toubal (2016). Knocking on Tax Haven's Door: Multinational Firms and Transfer Pricing. Review of Economics and Statistics, Forthcoming.

   
+ Abstract, Online Appendix and Bibtex

This paper analyzes the transfer pricing of multinational firms. Intra-firm prices may systematically deviate from arm's length prices for two motives: pricing to market and tax avoidance. Using French firm-level data on arm's length and intra-firm export prices, we find that the sensitivity of intra-firm prices to foreign taxes is reinforced once we control for pricing-to-market determinants. Most importantly, we find no evidence of tax avoidance if we disregard tax haven destinations. Tax avoidance through transfer pricing is economically sizable. The bulk of this loss is driven by the exports of 450 firms to ten tax havens.

 

Online Appendix

 

Bibtex

@article {RESTATXXX,
author = {Davies, Ron, Martin, Julien, Parenti, Mathieu and Toubal, Farid},
title = {Knocking on Tax Haven's Door: Multinational Firms and Transfer Pricing},
journal = {Review of Economics and Statistics},
volume = {Forthcoming},
}

 

Anthony Edo and Farid Toubal (2017). Immigration and the Gender Wage Gap. European Economic Review, , 92(2): 196-214.

   
+ Abstract, Online Appendix and Bibtex

This paper investigates the effects of immigration on the gender wage gap. Using a detailed individual French dataset, we shed lights on the strong feminization of the immigrant workforce which coincides with an rise in the gender wage gap from 1990 to 2010. Our theoretical model predicts that a shift in the supply of female workers increases the gender wage gap when men and women are imperfect substitutes in production. Our structural estimate points to an imperfect substitutability between men and women workers of similar education, experience and occupation. Our econometric result indicates that a 10% increase in the relative supply of immigrant female workers lowers by 4% the relative wage of female native workers belonging to the same education-experience group. Accounting for cross-group effects, our simulations show that the rise in the relative number of female immigrants decreases the relative wage of female native workers, thereby contributing to a widening native gender wage gap.

 

Online Appendix

 

Bibtex

@article{ET2017,
title = "Immigration and the gender wage gap ",
journal = "European Economic Review ",
volume = "92",
pages = "196 - 214",
year = "2017",
note = "",
issn = "0014-2921",
doi = "http://doi.org/10.1016/j.euroecorev.2016.12.005",
url = "http://www.sciencedirect.com/science/article/pii/S0014292116302264",
author = "Anthony Edo and Farid Toubal",
keywords = "Immigration",
keywords = "Wages",
keywords = "Gender gap",
keywords = "Elasticity of substitution " }

 

Mathieu Couttenier and Farid Toubal (2017). Corruption for Sales. Journal of Comparative Economics, 45(1): 56-66.

   
+ Abstract and Bibtex

This paper investigates the impact of corruption on foreign affiliates’ sales of German multinationals that differ in their level of experience in the foreign market. We exploit the panel dimension of a detailed firm-level dataset to show that more experienced firms are less likely to suffer from the costs related to corruption. Controlling for persistent and unobserved factors at the country and firm levels, we show that corruption reduces unambiguously the sales of new entering firms, while having no impact on the sales of incumbents.

 

Bibtex

@article{CT2017,
title = "Corruption for sales ",
journal = "Journal of Comparative Economics ",
volume = "45",
number = "1",
pages = "56 - 66",
year = "2017",
note = "Institutions and Economic Change ",
issn = "0147-5967",
doi = "http://doi.org/10.1016/j.jce.2016.11.008",
url = "http://www.sciencedirect.com/science/article/pii/S0147596716300956",
author = "Mathieu Couttenier and Farid Toubal",
keywords = "Multinational firms",
keywords = "Corruption",
keywords = "FDI "
}

 

Victor Ginsburgh, Jacques Melitz and Farid Toubal (2017). Foreign Language Learning and Trade. Review of International Economics, 25(2): 320--361.

   
+ Abstract and Bibtex

The paper is devoted to an econometric analysis of learning foreign languages in all parts of the world. Our sample covers 193 countries and 13 important languages. Four factors significantly explain learning: world population of speakers of home language, trade with speakers of foreign language, linguistic distance between home and foreign language and literacy. Trade may well deserve more emphasis than the other three factors, not only for its significance, but also because its direction can change faster and by a larger order of magnitude. Controlling for any of the 13 target languages, including English, is of no particular importance.

 

Bibtex@article {GMT2017,
author = {Ginsburgh, Victor and Melitz, Jacques and Toubal, Farid},
title = {Foreign Language Learning and Trade},
journal = {Review of International Economics},
volume = {25},
number = {2},
issn = {1467-9396},
url = {http://dx.doi.org/10.1111/roie.12268},
doi = {10.1111/roie.12268}, pages = {320--361}, year = {2017}, }

 

Peter Egger and Farid Toubal (2016). Common Spoken Language and International Trade. in Victor Ginsburgh and Shlomo Weber eds., The Palgrave Handbook of Economics and Language, Vol. 1, Chapter 9.

   
+ Abstract and Bibtex

This chapter surveys a host aspects of language communality between countries with regard to their relevance for international trade. It provides a broad overview of the measurement of common native and acquired spoken languages and other measures of cultural proximity in a very broad sense. It then puts language communality in the context of international economics to allude to an interpretation of common language parameters in demand or gravity equations. Apart from such a generic treatment, the chapter also undertakes a novel empirical analysis -- estimating common language effects from aggregate as well as product-level bilateral trade flows. Finally, it finishes with an overview of topics worthy of investigation in the context of common languages as determinants of goods demand across international borders.

Bibtex

@incollection{gs:2016,   
author      = "Egger, Peter and Toubal, Farid",   
title       = "Common Spoken Language and International Trade",   
editor      = "Victor Ginsburgh and Shlomo Weber",   
booktitle   = "The Palgrave Handbook of Economics and Language",   
publisher   = "Palgrave Macmillan",   
year        = 2016,   
chapter     = 9, }

 

 

Jörn Kleinert, Julien Martin, and Farid Toubal (2015). The Few Leading the Many: Foreign Affiliates and Business Cycle Comovement. American Economic Journal: Macroeconomics, October, 2015.

VOX Column

   
+ Abstract and Bibtex

Newest Version

We argue that the co-fluctuation of business cycles across countries is largely due to linkages between multinational firms and their network of foreign affiliates. We document that there are very few foreign affiliates in France, but that they contribute considerably to aggregate economic activities. Moreover, they share close ties with their country of origin. They may therefore drive the synchronization of international business cycles. We exploit the heterogeneity in the intensity of activities and the origin of foreign affiliates across French regions to identify their impact on aggregate comovement. We find a causal impact of the presence of foreign affiliates on the comovement of business cycles between their region of location in France and their country of origin. We further show that the fragmentation of production within firm boundaries is an important mechanism explaining the international transmission of shocks.

Bibtex

@article{KMT2014,
Author = {Jörn Kleinert and Julien Martin and Farid Toubal},
Journal = {American Economic Journal: Macroeconomics},
Title = {The Few Leading the Many: Foreign Affiliates and Business Cycle Comovementt},
Year = {2014},
}

 

Anthony Edo and Farid Toubal (2015). Selective Immigration Policies and Wages Inequality. Review of International Economics, (23)1: 160-187.

   
+ Abstract and Bibtex

We quantify the overall impact of immigration on native wages in France from 1990 to 2010. Our short-run simulations indicate that immigration has decreased native wages by 0.6%. We find on average no impact of immigration on wages in the long run. However, we show that the long-run effects of immigration on wages are detrimental to high skilled native workers and benefits to low skilled native workers. Our structural estimation allows us to evaluate the impact of "selective" migration policies. In particular, we find that selective immigration policies toward high educated workers reduce the wage dispersion of French native workers.

 

Bibtex

@article {ROIE:ROIE12163,
author = {Edo, Anthony and Toubal, Farid},
title = {Selective Immigration Policies and Wages Inequality},
journal = {Review of International Economics},
volume = {23},
number = {1},
issn = {1467-9396},
url = {http://dx.doi.org/10.1111/roie.12163},
doi = {10.1111/roie.12163},
pages = {160--187},
year = {2015},

}

.

Alireza Naghavi, Julia Spies and Farid Toubal (2015). Intellectual Property Rights, Product Complexity, and the Organization of Multinational Firms. Canadian Journal of Economics, 48 (3), August 2015.

   
+ Abstract and Bibtex

This paper studies how the Intellectual Property Right (IPR) regime in destination countries influences the way multinationals structure the international organization of their production. In particular, we explore how multinationals divide tasks of different complexities across countries with different levels of IPR protec- tion. The analysis studies the decision of firms between procurement from related parties and from independents suppliers at the product level. It also breaks down outsourcing into two types by distinguishing whether or not they involve technology sharing between the two parties. We combine data from a French firm-level survey on the mode choice for each transaction with a newly developed complexity measure at the product level. Our results confirm that firms are generally reluctant to source highly complex goods from outside firm boundaries. By studying the interaction between product complexity and the IPR protection, we obtain that (i) for technology-sharing-outsourcing IPRs promote outsourcing of more complex goods to a destination country by guaranteeing the protection of their technology, (ii) for non-technology-related-outsourcing IPRs attract the outsourcing of less complex products that are more prone to reverse engineering and simpler to decodify and imitate.

Bibtex

@article{NST2014,
Author = {Naghavi Alireza and Julia Spies and Farid Toubal},
Journal = {Canadian Journal of Economics},
Title = {Intellectual Property Rights, Product Complexity, and the Organization of Multinational Firms},
Year = {2014},
}

 

Bruce Blonigen, Lionel Fontagné, Nicholas Sly and Farid Toubal (2014). Cherries for Sales: The Incidence and Timing of Cross-Border M&A. Journal of International Economics, 94(2): 341-357.

VOX Column

   
+ Abstract and Bibtex

This paper develops a model of cross-border M&A activity that features firm-level productivity shocks and endogenous export activity. We show that foreign firms will be relatively more attracted to targets in the domestic country that had high productivity levels that induced them to invest in large export networks several years prior to acquisition, but subsequently experienced a negative productivity shock (i.e., cherries for sale). From the theory we derive a dynamic panel binary choice empirical model to predict cross-border M&A activity, and find strong evidence for our hypotheses connecting the evolution of firm-level productivity to the ultimate targets of cross-border acquisitions using French firm-level data.

Bibtex

@article{Blonigen2014341,
title = "Cherries for sale: The incidence and timing of cross-border M\&A ",
journal = "Journal of International Economics ",
volume = "94",
number = "2",
pages = "341 - 357",
year = "2014",
note = "",
issn = "0022-1996",
doi = "http://dx.doi.org/10.1016/j.jinteco.2014.08.005",
url = "http://www.sciencedirect.com/science/article/pii/S0022199614000981",
author = "Bruce A. Blonigen and Lionel Fontagné and Nicholas Sly and Farid Toubal",
keywords = "Foreign direct investment",
keywords = "Productivity",
keywords = "Export networks ",
abstract = "Abstract This paper develops a model of cross-border M\&A activity that features firm-level productivity shocks and endogenous export activity. We show that foreign firms will be relatively more attracted to targets in the domestic country that had high productivity levels that induced them to invest in large export networks several years prior to acquisition, but subsequently experienced a negative productivity shock (i.e., cherries for sale). From the theory we derive a dynamic panel binary choice empirical model to predict cross-border M\&A activity, and find strong evidence for our hypotheses connecting the evolution of firm-level productivity to the ultimate targets of cross-border acquisitions using French firm-level data. "
}

 

Jacques Melitz and Farid Toubal (2014). Native Language, Spoken Language, Translation and Trade. Journal of International Economics, Vol. 93(2): 351-363.

Handelsblatt Column (German)

   
+ Abstract, Data and Bibtex

We construct new series for common native language and common spoken language for 195 countries, which we use together with series for common official language and linguistic proximity in order to draw inferences about (1) the aggregate impact of all linguistic factors on bilateral trade, (2) the separate role of ease of communication as distinct from ethnicity and trust, and (3) the contribution of translation and interpreters to ease of communication. The results show that the impact of linguistic factors, all together, is at least twice as great as the usual dummy variable for common language, resting on official language, would say. In addition, ease of communication plays a distinct role, apart from ethnicity and trust, and so far as ease of communication enters, translation and interpreters are significant. Finally, emigrants have much to do with the role of ethnicity and trust in linguistic influence.

Data and codes: Data Appendix.

Bibtex

@article{Melitz2014351,
title = "Native language, spoken language, translation and trade ",
journal = "Journal of International Economics ",
volume = "93",
number = "2",
pages = "351 - 363",
year = "2014",
note = "",
issn = "0022-1996",
doi = "http://dx.doi.org/10.1016/j.jinteco.2014.04.004",
url = "http://www.sciencedirect.com/science/article/pii/S0022199614000543",
author = "Jacques Melitz and Farid Toubal",
keywords = "Language",
keywords = "Bilateral trade",
keywords = "Gravity models ",
abstract = "Abstract We construct new series for common native language and common spoken language for 195 countries, which we use together with series for common official language and linguistic proximity in order to draw inferences about (1) the aggregate impact of all linguistic factors on bilateral trade, (2) the separate role of ease of communication as distinct from ethnicity and trust, and (3) the contribution of translation and interpreters to ease of communication. The results show that the impact of linguistic factors, all together, is at least twice as great as the usual dummy variable for common language, resting on official language, would say. In addition, ease of communication plays a distinct role, apart from ethnicity and trust, and so far as ease of communication enters, translation and interpreters are significant. Finally, emigrants have much to do with the role of ethnicity and trust in linguistic influence. "
}

  Markus Kelle, Horst Raff, Jörn Kleinert and Farid Toubal (2013). Cross-Border and Foreign Affiliate Sales of Services: Evidence from German Micro-Data. The World Economy, Vol. 36(11): 1373-1392.
   
+ Abstract and Bibtex

We merge German balance-of-payments and foreign-affiliate-trade statistics to obtain data about trade in commercial services at the firm level. We use these data to study export market participation and the choice of export mode: cross-border versus foreign affiliate sales. We find that for firms in our sample productivity is both a statistically significant and economically important determinant of the export participation and export mode choice. We also identify the role of industry- and country-specific determinants.

Bibtex

@article {TWEC:TWEC12093,
author = {Kelle, Markus and Kleinert, Joern and Raff, Horst and Toubal, Farid},
title = {Cross-border and Foreign Affiliate Sales of Services: Evidence from German Microdata},
journal = {The World Economy},
volume = {36},
number = {11},
issn = {1467-9701},
url = {http://dx.doi.org/10.1111/twec.12093},
doi = {10.1111/twec.12093},
pages = {1373--1392},
year = {2013},
}

 

Fabrice Defever and Farid Toubal (2013). Productivity, Relationship-Specific Inputs and the Sourcing Modes of Multinational. Journal of Economic Behavior and Organization, Vol. 94, Pages 345–357.

VOX Column

   
+ Abstract, Online Appendix and Bibtex

We investigate the roles of productivity and the specificity of inputs for the international sourcing strategy of firms which are part of a multinational network. We present a framework in which firms decide to import from a foreign independent supplier or from their related party abroad according to these two dimensions. We use a detailed survey that provides a detailed geographical breakdown of French firms’ imports at the product level as well as the sourcing mode used for each transaction. The dataset also provides information to estimate the firms' productivity and their intensity in relationship-specific inputs. After controlling for countries of origin, products and sectors specific effects, the empirical results provide evidence that for the most productive multinationals the likelihood of trading through an independent supplier is higher especially if they use relationship-specific inputs intensively.

Online Appendix

Bibtex

@article{Defever2013345,
title = "Productivity, relationship-specific inputs and the sourcing modes of multinationals ",
journal = "Journal of Economic Behavior & Organization ",
volume = "94",
number = "0",
pages = "345 - 357",
year = "2013",
note = "",
issn = "0167-2681",
doi = "http://dx.doi.org/10.1016/j.jebo.2012.11.006",
url = "http://www.sciencedirect.com/science/article/pii/S0167268112002429",
author = "Fabrice Defever and Farid Toubal",
keywords = "Productivity",
keywords = "Incomplete contracts",
keywords = "Intra-group trade",
keywords = "Outsourcing ",
abstract = "We investigate the roles of productivity and the specificity of inputs for the international sourcing strategy of firms which are part of a multinational network. We present a framework in which firms decide to import from a foreign independent supplier or from their related party abroad according to these two dimensions. We use a detailed survey that provides a detailed geographical breakdown of French firms’ imports at the product level as well as the sourcing mode used for each transaction. The dataset also provides information to estimate the firms’ productivity and their intensity in relationship-specific inputs. After controlling for countries of origin, products and sectors specific effects, the empirical results provide evidence that for the most productive multinationals the likelihood of trading through an independent supplier is higher especially if they use relationship-specific inputs intensively. "
}

  Jörn Kleinert and Farid Toubal (2013). Production versus Distribution Oriented FDI. Review of World Economics, Vol. 149(3), Pages 423-442.
   
+ Abstract and Bibtex

The business literature has long recognized the importance of multinationals’ distribution networks. The empirical analysis of distribution-oriented FDI has, however, received little attention which is at least partly due to the lack of appropriate data. We present a slightly modified version of Helpman et al. (Am Econ Rev 94(1):300–316, 2004) that explicitly models the possibility for a multinational firm to export through its wholesale trade affiliate. We analyze the multinational firms’ choice between foreign production and foreign distribution. Our empirical analysis uses different discrete choice models and alternative specifications for several sub-samples of multinational firms. Our results show that the choice between distribution and production-oriented FDI is based on the trade-off between fixed and variable costs.

Bibtex

@article{
year={2013},
issn={1610-2878},
journal={Review of World Economics},
volume={149},
number={3},
doi={10.1007/s10290-013-0158-1},
title={Production versus distribution-oriented FDI},
url={http://dx.doi.org/10.1007/s10290-013-0158-1},
publisher={Springer Berlin Heidelberg},
keywords={Multinational firms; Wholesale sales; Discrete choice; F23; F12; C25},
author={Kleinert, Joern and Toubal, Farid},
pages={423-442},
language={English}
}

  Gabriel Felbermayr and Farid Toubal (2012). Revisiting the Trade-Migration Nexus: Evidence from New OECD data. World Development, 40(5), 928–937.
   
+ Abstract and Bibtex

International migrants contribute to bilateral trade creation if their presence reduces information costs or entails additional demand for goods from their source countries. Using new data on stocks of foreign-born individuals by skill class, we try to separately quantify those two channels. We assume that improved information affects host countries’ imports and exports symmetrically, while the preference channel matters for imports only. On average, for differentiated goods, both channels contribute evenly toward the total trade-creating effect of migration. In line with expectations, the relative importance of the trade cost channel is largest for homogeneous goods and for high-skilled migrants.

Bibtex

@article{Felbermayr2012928,
title = "Revisiting the Trade-Migration Nexus: Evidence from New \{OECD\} Data ",
journal = "World Development ",
volume = "40",
number = "5",
pages = "928 - 937",
year = "2012",
note = "",
issn = "0305-750X",
doi = "http://dx.doi.org/10.1016/j.worlddev.2011.11.016",
url = "http://www.sciencedirect.com/science/article/pii/S0305750X11003007",
author = "Gabriel J. Felbermayr and Farid Toubal",
keywords = "migration",
keywords = "international trade",
keywords = "gravity equation ",
abstract = "Summary International migrants contribute to bilateral trade creation if their presence reduces information costs or entails additional demand for goods from their source countries. Using new data on stocks of foreign-born individuals by skill class, we try to separately quantify those two channels. We assume that improved information affects host countries’ imports and exports symmetrically, while the preference channel matters for imports only. On average, for differentiated goods, both channels contribute evenly toward the total trade-creating effect of migration. In line with expectations, the relative importance of the trade cost channel is largest for homogeneous goods and for high-skilled migrants. "
}

  Gabriel Felbermayr, Benjamin Jung and Farid Toubal (2011). Ethnic Network, Information and International Trade : Revisiting the Evidence. Annales d’Economie et de Statistique. No. 97/98, 4.
   
+ Abstract, Additional Tables, Data and Bibtex

Co-ethnic networks foster trade by providing information about trading opportunities and taking advantage of mutual trust. While the economics literature usually focuses on direct ethnic links between source and host countries, sociological studies adopt a broader perspective. They emphasize the role of ethnic minorities as middlemen who organize trade between various regions in the world. Rauch and Trindade [2002] study those indirect links between ethnic Chinese in different host countries. We revisit their work, particularly focusing on the trade-cost channel. Moreover, we extend the analysis to all potential ethnic networks. Using new data on bilateral stocks of migrants from the World Bank for the year of 2000, we find that the trade creating potential of the Chinese network is dwarfed by other ethnic networks, e. g., the Polish, the Turkish, the Mexican, or the Pakistani networks. The large heterogeneity in the pro-trade effect of different networks is, among other things, explained by the share of high-skilled immigrants, the degree of ethnic fragmentation, and GDP per capita.

Additional Tables and Data

Bibtex

@article{FJTAE ,
title = "Ethnic Networks, Information, and International Trade: Revisiting the Evidence ",
journal = "Annals of Economics and Statistics",
month = "June",
number = "97/98",
pages = "41-70",
year = "2010",
}

 

Gabriel Felbermayr and Farid Toubal (2010). Cultural Proximity and Trade. European Economic Review, Volume 54(2), 279-293.

VOX Column; TELOS-EU

   
+ Abstract, Data and Bibtex

Cultural proximity is an important determinant of bilateral trade volumes. However, empirical quantification and testing are difficult due to the elusiveness of the concept and lack of observability. This paper draws on bilateral score data from the Eurovision Song Contest, a very popular pan-European television show, to construct a measure of cultural proximity which varies over time and within country pairs, and that correlates strongly with conventional indicators. Within the framework of a theory-grounded gravity model, we show that our measure positively affects trade volumes even if controlling for standard measures of cultural proximity and bilateral fixed effects.

Data Appendix (with Bilateral Eurovision Song Contest Scores)

Bibtex

@article{Felbermayr2010279,
title = "Cultural proximity and trade ",
journal = "European Economic Review ",
volume = "54",
number = "2",
pages = "279 - 293",
year = "2010",
note = "",
issn = "0014-2921",
doi = "http://dx.doi.org/10.1016/j.euroecorev.2009.06.009",
url = "http://www.sciencedirect.com/science/article/pii/S0014292109000725",
author = "Gabriel J. Felbermayr and Farid Toubal",
keywords = "International trade",
keywords = "Gravity equation",
keywords = "Cultural proximity",
keywords = "Eurovision song contest ",
abstract = "Cultural proximity is an important determinant of bilateral trade volumes. However, empirical quantification and testing are difficult due to the elusiveness of the concept and lack of observability. This paper draws on bilateral score data from the Eurovision Song Contest, a very popular pan-European television show, to construct a measure of cultural proximity which varies over time and within country pairs, and that correlates strongly with conventional indicators. Within the framework of a theory-grounded gravity model, we show that our measure positively affects trade volumes even if controlling for standard measures of cultural proximity and bilateral fixed effects. "
}

  Jörn Kleinert and Farid Toubal (2010). Gravity for FDI. Review of International Economics, 18(1) 1-13, 2010.
   
+ Abstract and Bibtex

Gravity equations explaining foreign affiliates' sales are ad hoc and hence estimated coefficients are hard to interpret. We therefore provide the theoretical underpinnings of the gravity equation applied to the analysis of sales of foreign affiliates of multinational firms. We argue that the success of the gravity equation results from the fact that it can be derived from various theoretical models. We illustrate this point by deriving a gravity equation from three different models of multinational firms. Using data on real affiliate sales, we show how the gravity equation can nevertheless be used to discriminate between the different theoretical models.

Bibtex

@article {ROIE:ROIE869,
author = {Kleinert, Joern and Toubal, Farid},
title = {Gravity for FDI},
journal = {Review of International Economics},
volume = {18},
number = {1},
publisher = {Blackwell Publishing Ltd},
issn = {1467-9396},
url = {http://dx.doi.org/10.1111/j.1467-9396.2009.00869.x},
doi = {10.1111/j.1467-9396.2009.00869.x},
pages = {1--13},
year = {2010},
}

  Gábor Békés, Jörn Kleinert and Farid Toubal (2009). Spillovers from Multinationals to Heterogeneous Domestic Firms : Evidence from Hungary.The World Economy 32(10) 1408-1433, 2009.
   
+ Abstract and Bibtex

Firms cluster their economic activities to exploit technological and informational spillovers from other firms. Spillovers from multinational firms can be particularly beneficial to firms in less developed economies, because technological superiority and management expertise of foreign multinational firms yield various opportunities for learning. Yet, the importance of foreign firms’ spillovers might vary with respect to two key features of domestic firms: their productivity level and their export status. In line with theories on the absorptive capacity of firms, we argue on the basis of an empirical analysis of Hungarian firms that larger and more productive firms are more able than smaller firms to reap spillovers from multinationals. However, the export status is found to be of minor importance once higher productivity is controlled for.

Bibtex

@article {TWEC:TWEC1179,
author = {Bekes, Gabor and Kleinert, Joern and Toubal, Farid},
title = {Spillovers from Multinationals to Heterogeneous Domestic Firms: Evidence from Hungary},
journal = {World Economy},
volume = {32},
number = {10},
publisher = {Blackwell Publishing Ltd},
issn = {1467-9701},
url = {http://dx.doi.org/10.1111/j.1467-9701.2009.01179.x},
doi = {10.1111/j.1467-9701.2009.01179.x},
pages = {1408--1433},
year = {2009},
}

  Claudia Buch and Farid Toubal (2009). Openness and Growth : The Long Shadow of the Berlin Wall. Journal of Macroeconomics, 31 (3) : 409-422.
   
+ Abstract and Bibtex

The question whether international openness causes higher domestic growth has been subject to intense discussions in the empirical growth literature. This paper addresses the issue in the context of the fall of the Berlin Wall in 1989. We analyze whether the slow convergence in per capita incomes between East and West Germany and the lower international openness of East Germany are linked. We address the endogeneity of openness by adapting the methodology proposed by Frankel and Romer (1999) to a panel framework. We instrument openness with time-invariant exogenous geographic variables and time-varying exogenous policy variables. We also distinguish the impact of different channels of integration. Our paper has three main findings. First, geographic variables have a significant impact on regional openness. Second, controlling for geography, East German states are less integrated into international markets along all dimensions of integration considered. Third, the degree of openness for trade has a positive impact on regional income per capita.

Bibtex

@article{Buch2009409,
title = "Openness and growth: The long shadow of the Berlin Wall ",
journal = "Journal of Macroeconomics ",
volume = "31",
number = "3",
pages = "409 - 422",
year = "2009",
note = "",
issn = "0164-0704",
doi = "http://dx.doi.org/10.1016/j.jmacro.2008.07.004",
url = "http://www.sciencedirect.com/science/article/pii/S0164070408000499",
author = "Claudia M. Buch and Farid Toubal",
keywords = "Openness",
keywords = "Growth",
keywords = "German re-unification ",
abstract = "The question whether international openness causes higher domestic growth has been subject to intense discussions in the empirical growth literature. This paper addresses the issue in the context of the fall of the Berlin Wall in 1989. We analyze whether the slow convergence in per capita incomes between East and West Germany and the lower international openness of East Germany are linked. We address the endogeneity of openness by adapting the methodology proposed by Frankel and Romer (1999) to a panel framework. We instrument openness with time-invariant exogenous geographic variables and time-varying exogenous policy variables. We also distinguish the impact of different channels of integration. Our paper has three main findings. First, geographic variables have a significant impact on regional openness. Second, controlling for geography, East German states are less integrated into international markets along all dimensions of integration considered. Third, the degree of openness for trade has a positive impact on regional income per capita. "
}

  Claudia Buch, Jörn Kleinert and Farid Toubal (2006). Where Enterprises Lead, People Follow ? Links Between Migration and German FDI. European Economic Review, 50 (8) 2017-2036.
   
+ Abstract and Bibtex

Standard neoclassical models of economic integration are based on the assumptions that capital and labor are substitutes and that the geography of factor market integration does not matter. Yet, these two assumptions are violated if agglomeration forces among factors from specific source countries are at work. Agglomeration implies that factors behave as complements and that the country of origin matters. This paper analyzes agglomeration between capital and labor empirically. We use state-level German data to answer the question whether and how migration and foreign direct investment (FDI) are linked. Stocks of inward FDI and of immigrants have similar determinants, and the geography of factor market integration matters. There are higher stocks of inward FDI in German states hosting a large foreign population from the same country of origin. This agglomeration effect is confined to higher-income source countries.

Bibtex

@article{Buch20062017,
title = "Where enterprises lead, people follow? Links between migration and \{FDI\} in Germany ",
journal = "European Economic Review ",
volume = "50",
number = "8",
pages = "2017 - 2036",
year = "2006",
note = "",
issn = "0014-2921",
doi = "http://dx.doi.org/10.1016/j.euroecorev.2005.11.002",
url = "http://www.sciencedirect.com/science/article/pii/S0014292105001418",
author = "Claudia M. Buch and Joern Kleinert and Farid Toubal",
keywords = "Migration",
keywords = "Foreign direct investment",
keywords = "Agglomeration ",
abstract = "Standard neoclassical models of economic integration are based on the assumptions that capital and labor are substitutes and that the geography of factor market integration does not matter. Yet, these two assumptions are violated if agglomeration forces among factors from specific source countries are at work. Agglomeration implies that factors behave as complements and that the country of origin matters. This paper analyzes agglomeration between capital and labor empirically. We use state-level German data to answer the question whether and how migration and foreign direct investment (FDI) are linked. Stocks of inward \{FDI\} and of immigrants have similar determinants, and the geography of factor market integration matters. There are higher stocks of inward \{FDI\} in German states hosting a large foreign population from the same country of origin. This agglomeration effect is confined to higher-income source countries. "
}

  Claudia Buch, Jörn Kleinert, Alexander Lipponer and Farid Toubal (2005). Determinants and Effects of Foreign Direct Investment : Evidence from German Firm-Level Data. Economic Policy 20 (41) : 52-110.  
   
+ Abstract and Bibtex

Foreign direct investment is an essential aspect of ‘globalization’ yet its empirical determinants are not well understood. What we do know is based either on poor data for a wide range of nations, or good data for the US and Swedish cases. In this paper, we provide evidence on the determinants of the activities of German multinational firms by using a newly available firm-level data set from the Deutsche Bundesbank. The specific goal of this paper is to demonstrate the relative role of country-level and firm-level determinants of foreign direct investment. We focus on three main questions: First, what are the main driving forces of German firms’ multinational activities? Second, is there evidence that sector-level and firm-level factors shape internationalization patterns? Third, is there evidence of agglomeration effects in the foreign activities of German firms?

We find that the market access motive for internationalization dominates. Firms move abroad mainly to gain better access to large foreign markets. Cost-saving motives, however, are important for some manufacturing sectors. Our results strongly suggest that firm-level heterogeneity has an important influence on internationalization patterns – as stressed by recent models of international trade. We also find positive agglomeration effects for the activities of German firms that stem from the number of other German firms that are active on a given foreign market.

In terms of lessons for economic policy, our results show that lowering barriers to the integration of markets and encouraging the formation of human capital can promote the activities of multinational firms. However, our results related to the heterogeneity of firms and agglomeration tendencies show that it might be difficult to fine-tune policies directed at the exploitation of synergies and at the creation of clusters of foreign firms.

Bibtex

@article {ECOP:ECOP133,
author = {Buch, Claudia M. and Kleinert, Joern and Lipponer, Alexander and Toubal, Farid},
title = {Determinants and effects of foreign direct investment: evidence from German firm-level data*},
journal = {Economic Policy},
volume = {20},
number = {41},
publisher = {Blackwell Publishing, Ltd.},
issn = {1468-0327},
url = {http://dx.doi.org/10.1111/j.1468-0327.2005.00133.x},
doi = {10.1111/j.1468-0327.2005.00133.x},
pages = {52--110},
year = {2005},
}

  Claudia Buch, Jörn Kleinert and Farid Toubal (2004). The Distance Puzzle : On the Interpretation of the Distance Coefficient in Gravity Equations. Economics Letters 83 (3) : 293-298.
   
+ Abstract and Bibtex

Although globalization has diminished the importance of distance, empirical gravity models find little change in distance coefficients. We argue that changing distance costs are largely reflected in the constant term. A proportional fall in distance costs is consistent with constant distance coefficients.

Bibtex

@article{Buch2004293,
title = "The distance puzzle: on the interpretation of the distance coefficient in gravity equations ",
journal = "Economics Letters ",
volume = "83",
number = "3",
pages = "293 - 298",
year = "2004",
note = "",
issn = "0165-1765",
doi = "http://dx.doi.org/10.1016/j.econlet.2003.10.022",
url = "http://www.sciencedirect.com/science/article/pii/S0165176503003860",
author = "Claudia M. Buch and Joern Kleinert and Farid Toubal",
keywords = "Distance coefficients",
keywords = "Gravity equations",
keywords = "Globalization ",
abstract = "Although globalization has diminished the importance of distance, empirical gravity models find little change in distance coefficients. We argue that changing distance costs are largely reflected in the constant term. A proportional fall in distance costs is consistent with constant distance coefficients. "
}

  Kai Carstensen and Farid Toubal (2004). Foreign Direct Investment in Central and Eastern European Countries : A Dynamic Panel Analysis. Journal of Comparative Economics 32(1) : 3-22, 2004.
   
+ Abstract and Bibtex

This paper uses dynamic panel data methods to examine the determinants of foreign direct investment (FDI) into Central and Eastern European countries (CEECs). Our empirical model shows that the traditional determinants, such as market potential, low relative unit labor costs, a skilled workforce and relative endowments, have significant and plausible effects. In addition, transition-specific factors, such as the level and method of privatization and the country risk, play important roles in determining the flows of FDI into the CEECs and help to explain the differing attractiveness of the individual countries to foreign investors.

Bibtex

@article{Carstensen20043,
title = "Foreign direct investment in Central and Eastern European countries: a dynamic panel analysis ",
journal = "Journal of Comparative Economics ",
volume = "32",
number = "1",
pages = "3 - 22",
year = "2004",
note = "",
issn = "0147-5967",
doi = "http://dx.doi.org/10.1016/j.jce.2003.11.001",
url = "http://www.sciencedirect.com/science/article/pii/S0147596703001318",
author = "Kai Carstensen and Farid Toubal",
keywords = "Transition economies",
keywords = "\{FDI\}",
keywords = "Panel estimation ",
abstract = "This paper uses dynamic panel data methods to examine the determinants of foreign direct investment (FDI) into Central and Eastern European countries (CEECs). Our empirical model shows that the traditional determinants, such as market potential, low relative unit labor costs, a skilled workforce and relative endowments, have significant and plausible effects. In addition, transition-specific factors, such as the level and method of privatization and the country risk, play important roles in determining the flows of \{FDI\} into the \{CEECs\} and help to explain the differing attractiveness of the individual countries to foreign investors. Journal of Comparative Economics 32 (1) (2004) 3- 22. "
}

  Claudia Buch and Farid Toubal (2003). Economic Integration and FDI in Transition Economies : What Can We Learn from German Data ? DIW Vierteljahrshefte zur Wirtschaftsforschung 72 (4) : 594-610.
   
+ Abstract

The opening up of Central and Eastern Europe has provided new investment opportunities for German investors. At the same time, importing capital from abroad can be an efficient mechanism towards increased factor accumulation for the accession states to the European Union. In this paper, we study the development of German FDI into the accession states from an aggregated, sectoral, and a firm-level perspective. We assess whether patterns of FDI into the transition conomies confirm recent theories of FDI and whether we find evidence that the heterogeneity of firms matters for FDI decisions.

 

 


Paper in French

Fabrice Defever and Farid Toubal. (2010). Importations de biens intermédiaires et choix organisationnel des firmes multinationales françaises. Economie et Statistique, No. 435-436, 169-184, 2010.

Farid Toubal (2004). Localisation des firmes multinationales allemandes dans les pays de l’Est. Économie et Prévision, 163, 2004/2.


Books and Policy reports

Paul Berenberg-Gossler, Aurélien Eyquem and Farid Toubal (2016). Les centres de décision d’entreprises étrangères en France : une analyse comparée. Focus 013-2016. Conseil d'Analyse Economique.

Farid Toubal and Alain Trannoy (2016). L’attractivité de la France pour les centres de décision des entreprises. Note du CAE 30, April 2016. Conseil d'Analyse Economique.

Lionel Fontagné and Farid Toubal (2011). Commerce de biens intermédiaires et compétitivité. Prospective du couple franco-allemand, Rapport du Sénat, 663, Juin 2011.

Lionel Fontagné and Farid Toubal (2011). Investissement direct étranger (IDE) et performances des entreprises. Conseil d'Analyse Economique, Rapport No. 89, 2010.


Other Writings

Knocking on tax haven's door: Multinational firms and transfer pricing (With Ron Davies, Julien Martin and Mathieu Parenti), VOX-EU

Timing takeovers – The incidence of cross-border acquisitions (With Bruce Blonigen, Lionel Fontagné, Nicholas Sly), VOX-EU

The Granular Origins of Real Business Cycle Comovements (With Julien Martin and Jörn Kleinert), VOX-EU

Cultural proximity and trade: Evidence from Eurovision (With Gabriel Felbermayr), VOX-EU

Global sourcing: Evidence from French firms (With Fabrice Defever), VOX-EU

FDI in Intangible Assets. In Princeton Encyclopedia of the World Economy edited by Kenneth A. Reinert & Ramkishen S. Rajan. 2009.

Eurovision : bien chanter ne suffit pas (TELOS: 30 mai 2008)

Media and Press

L'Eurovision, de la géopolitique ? Conchita Wurst, un contre-exemple du vote traditionnel (Le Nouvel Obs. 12 mai 2014)

Eurovision : de la musique et de la géopolitique (Europe 1: 07 mai 2014)

Attractivité de la France (RFI, 17 février 2014)

Les investissements étrangers en France : biais statistiques et astuces comptables (Le Monde: 03 février 2014)

Quels enseignements de l’analyse du commerce en valeur ajoutée ? (Problèmes économiques: Novembre 2013)

La recette pour gagner l’Eurovision (20 minutes: 3 juin 2008)

JECO 2013: Quand le commerce mondial devient un jeu de piste

JECO 2011: La sous-traitance maltraitée en France