Foreign Direct Investment and Ireland's Tiger Economy (B)

Laura  Alfaro; Matthew  Johnson

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Supplement | HBS Case Collection | March 2010 (Revised May 2013)

Foreign Direct Investment and Ireland's Tiger Economy (B)

by Laura Alfaro and Matthew Johnson

Keywords: Foreign Direct Investment; Northern Ireland;

Language: English

Format: Print

10 pages

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Citation:

Alfaro, Laura, and Matthew Johnson. "Foreign Direct Investment and Ireland's Tiger Economy (B)." Harvard Business School Supplement 710-057, March 2010. (Revised May 2013.)

About the Author

Laura Alfaro

Warren Alpert Professor of Business Administration

General Management

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Article | American Economic Journal: Economic Policy | May 2018

Selection and Market Reallocation: Productivity Gains from Multinational Production

Laura Alfaro and Maggie X. Chen

Assessing the productivity gains from multinational production has been a vital topic of economic research and policy debate. Positive aggregate productivity gains are often attributed to within-firm productivity improvement; however, an alternative, less emphasized explanation is between-firm selection and market reallocation, whereby competition from multinationals leads to factor reallocation and the survival of only the most productive domestic firms. We investigate the roles of the two different mechanisms in determining the aggregate productivity gains by exploring their distinct predictions on the distributions of domestic firms: within-firm productivity improvement shifts the productivity and revenue distributions rightward while between-firm selection and market reallocation raise the left truncation of the distributions and shift revenue leftward. Using a rich cross-country firm-level panel dataset, we find significant evidence of both mechanisms, but between-firm selection and market reallocation accounts for the majority of aggregate productivity gains, suggesting that ignoring this channel could lead to substantial bias in understanding the nature of gains from multinational production.

Keywords: Productivity gains; multinational production; selection; Market Reallocation; and within-firm productivity; Multinational Firms and Management; Production; Performance Productivity; Competition; Mathematical Methods;

Citation:
Alfaro, Laura, and Maggie X. Chen. "Selection and Market Reallocation: Productivity Gains from Multinational Production." American Economic Journal: Economic Policy 10, no. 2 (May 2018): 1–38. (Also NBER Working Paper w18207. See Harvard Business School Working Paper, No. 12–111, 2015 for longer version.) View Details

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Other Unpublished Work | 2018

Protectionist Threats and Increasing Financial Volatility: Is Latin America at a Crossroads?

Laura Alfaro, Guillermo Calvo, Roque Benjamin Fernandez, Pablo Guidotti, Guillermo Perry, Liliana Rojas-Suarez and Ernesto Talvi

Citation:
Alfaro, Laura, Guillermo Calvo, Roque Benjamin Fernandez, Pablo Guidotti, Guillermo Perry, Liliana Rojas-Suarez, and Ernesto Talvi. "Protectionist Threats and Increasing Financial Volatility: Is Latin America at a Crossroads?" Comité Latinoamericano de Asuntos Financieros (CLAAF) Statement, April 2018. View Details

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Case | HBS Case Collection | November 2016 (Revised March 2018)

Brexit

Laura Alfaro, Jesse Schreger and Haviland Sheldahl-Thomason

After more than 40 years of membership in the European Union, the United Kingdom voted via referendum to separate from the EU on June 23, 2016. Following the surprise verdict (termed Brexit), a political upheaval followed, with many ministers, including Prime Minister David Cameron, resigning or being sacked, and markets collapsed. As markets recovered, Theresa May was chosen as the new prime minister of the UK in charge of leading the separation.
The future of the UK and its relationship with Europe was uncertain. No country had ever left the EU before, so there was no precedent to follow and no clear indication of what the UK planned to do after exiting. Why had the British voted to leave? Would the UK and the EU be able to agree on a mutually beneficial arrangement? What would be the effects, politically and economically, on the UK and European countries? The impact of the disunion on the relationship between the EU and the UK was yet to be seen.

Keywords: Voting; International Relations; Government and Politics; System Shocks; United Kingdom; European Union;

Citation:
Alfaro, Laura, Jesse Schreger, and Haviland Sheldahl-Thomason. "Brexit." Harvard Business School Case 717-028, November 2016. (Revised March 2018.) View Details

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Foreign Direct Investment and Ireland's Tiger Economy (B)

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