Found 41 article(s) for author 'Laura Alfaro'

Corporate Debt, Firm Size and Financial Fragility in Emerging Markets

Corporate Debt, Firm Size and Financial Fragility in Emerging Markets. Laura Alfaro, January 2019, Paper, “The post-Global Financial Crisis period shows a surge in corporate leverage in emerging markets and a number of countries with deteriorated corporate financial fragility indicators (Altman’s Z-score). Firm size plays a critical role in the relationship between leverage, firm fragility and exchange rate movements in emerging markets. While the relationship between firm-leverage and distress scores varies over time, the relationship between firm size and corporate vulnerability is relatively time-invariant. All else equal, large firms in emerging markets are more financially vulnerable and also systemically important. Consistent with the granular origins of aggregate fluctuations in Gabaix (2011), idiosyncratic shocks to the sales growth of large firms are positively and significantly correlated with GDP growth in our emerging markets sample. Relatedly, the negative impact of exchange rate shocks has a more acute impact on the sales growth of the more highly levered large firms.Link

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Introduction to: the euro at twenty

Introduction to: the euro at twenty. Laura Alfaro, November 27, 2018, Book Chapter, “January 1, 2019 marks 20 years since the introduction of the euro. This anniversary presents an opportunity to reflect on lessons learned from the first 20 years of EMU in Europe, and consider prospects for the future. The last few years have demonstrated the strains possible when multiple countries engage together in the bold venture of monetary union. The editors of Review of World Economics decided to invite several prominent thinkers to offer their insights, regarding what they believe was the biggest surprise from the euro’s first 20 years, and what is the biggest challenge for next 20 years.Link

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The Real Exchange Rate, Innovation and Productivity: Regional Heterogeneity, Asymmetries and Hysteresis

The Real Exchange Rate, Innovation and Productivity: Regional Heterogeneity, Asymmetries and Hysteresis. Laura Alfaro, May 2018, Paper, “We evaluate manufacturing firms’ responses to changes in the real exchange rate (RER) using detailed firm-level data for a large set of countries for the period 2001-2010. We uncover the following stylized facts: In export-oriented emerging Asia, real depreciations are associated with faster growth of firm-level TFP, higher sales and cash-flow, and higher probabilities to engage in R&D and to export. We find negative effects for firms in other emerging economies, which are relatively more import dependent, and no significant effects for firms in industrialized economies.Link

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On the Direct and Indirect Real Effects of Credit Supply Shocks

On the Direct and Indirect Real Effects of Credit Supply Shocks. Laura Alfaro, March 5, 2018, Paper, “We consider the real effects of bank lending shocks and how they permeate the economy through buyer-supplier linkages. We combine administrative data on all firms in Spain with a matched bank-firm-loan dataset incorporating information on the universe of corporate loans for 2003-2013. Using methods from the matched employer-employee literature for handling large data sets, we identify bank-specific shocks for each year in our sample. Combining the Spanish Input-Output structure and firm-specific measures of upstream and downstream exposure, we construct firm-specific exogenous credit supply shocks and estimate their direct and indirect effects on real activity.Link

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The Real Exchange Rate, Innovation and Productivity: A Cross-country Firm-level Analysis

The Real Exchange Rate, Innovation and Productivity: A Cross-country Firm-level Analysis. Laura Alfaro, 2017, Paper, “We use firm-level data for a large set of countries for the period 2001-2010 to evaluate manufacturing firms’ responses to changes in the real exchange rate (RER). We find that, in East Asian emerging countries, real depreciations are associated with faster firm-level TFP and sales growth; higher probabilities to engage in R&D; higher probabilities to export and higher export intensity; lower probabilities to import intermediate inputs; lower import intensity; and higher growth of cash flow.Link

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The Real Exchange Rate, Innovation and Productivity

The Real Exchange Rate, Innovation and Productivity. Laura Alfaro, November 2017, Paper, “We evaluate manufacturing firms’ responses to changes in the real exchange rate (RER) using detailed firm-level data for a large set of countries for the period 2001-2010. We uncover the following stylized facts: In emerging Asia, real depreciations are associated with faster growth of firm-level TFP, sales and cash-flow, higher probabilities to engage in R&D and export. We find no significant effects for firms from industrialized economies and negative effects for firms in other emerging economies, which are less export-intensive and more import-intensive.Link

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Introduction to the Symposium: Attracting and benefitting from Quality FDI

Introduction to the Symposium: Attracting and benefitting from Quality FDI. Laura Alfaro, September 19, 2017, Paper, “The topic of this Symposium is not only of utmost relevance for the academic and policy community, it is also very timely. The last two meetings of G20 leaders in Hamburg, Germany, and Chengdu, China, highlighted the importance of financing and other support mechanisms in implementing the global goals for sustainable development. The 2015 United Nations Third International Conference on Financing for Development, held in Addis Ababa, resulted in the groundbreaking agreement, the so-called Addis Ababa Action Agenda, containing bold measures to overhaul global finance practices and generate investments for tackling a range of economic, social and environmental challenges. Indeed, the cornerstone for the success of the new sustainable development agenda, which will be driven by the implementation of 17 Sustainable Development Goals (SDGs), is financing and investment.Link

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The Productivity Decline: Demographics, Robots, or Globalization?

The Productivity Decline: Demographics, Robots, or Globalization? Laura Alfaro, September 2017, Paper, “In the early 21st century, there was a noticeable trend of declining productivity growth. Despite the persistent decline in productivity growth, a consensus on its explanation had not been reached. Some of the debate focused on the technicalities of productivity measurement, and the structural shift involved with the increased usage and introduction of robots in place of workers, garnering the interest of academic economists, businesses and policymakers.” Link

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The Real Effects of Capital Controls: Firm-Level Evidence from a Policy Experiment

The Real Effects of Capital Controls: Firm-Level Evidence from a Policy Experiment. Laura Alfaro, June 2017, Paper, “This paper evaluates the effects of capital controls on firm-level stock returns and real investment using data from Brazil. On average, there is a statistically significant drop in cumulative abnormal returns consistent with an increase in the cost of capital for Brazilian firms following capital control announcements. Large firms and the largest exporting firms appear less negatively affected compared to external-finance-dependent firms, and capital controls on equity inflows have a more negative announcement effect on equity returns than those on debt inflows. Overall, the findings have implications for macro-finance models that abstract from heterogeneity at the firm level to examine the optimality of capital control taxation.Link

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