Laura Alfaro
Warren Alpert Professor of Business Administration
Warren Alpert Professor of Business Administration
Laura Alfaro is the Warren Alpert Professor of Business Administration. At Harvard since 1999, she served as Minister of National Planning and Economic Policy in Costa Rica from 2010-2012, taking a leave from HBS. She is Co-Editor of the Journal of International Economics and the World Bank Research Observer and Vice-President of LACEA, the Latin American and Caribbean Economist Association and a co-Chair of the World Economic Forum’s Global Future Council on the Future of Growth. She is also a Faculty Research Associate in the NBER International Finance and Macroeconomics (IFM) Program and the International Trade and Investment (ITI) Program, CEPR IFM program and co-Chair of the NBER’s Economics of Supply Chains conference, a joint effort with the Department of Homeland Security. Professor Alfaro is the author of multiple articles published in leading academic journals such as the American Economic Review, Review of Economic Studies, Journal of Political Economy, Journal of International Economics, and Harvard Business School cases related to the field of international economics and in particular international capital flows, foreign direct investment, sovereign debt, trade, and emerging markets. She is a member of the Latin-American Financial Regulatory Committee (CLAAF), the David Rockefeller Center for Latin American Studies (DRCLAS) policy committee, Faculty Associate at Harvard's Weatherhead Center for International Affairs, among others.
Professor Alfaro has taught in the first year and second year of the MBA program, the doctoral program, the General Management Program, the Program for Leadership Development, and in other executive education offerings. She earned her Ph.D. in Economics from the University of California, at Los Angeles (UCLA), where she received the Dissertation Fellowship award. She received a B.A in economics with honors from the Universidad de Costa Rica and a 'Licenciatura' from the Pontificia Universidad Católica of Chile where she graduated with the highest honors. She was awarded a Francisco Marroquin Foundation scholarship.
Laura Alfaro is the Warren Alpert Professor of Business Administration. At Harvard since 1999, she served as Minister of National Planning and Economic Policy in Costa Rica from 2010-2012, taking a leave from HBS. She is Co-Editor of the Journal of International Economics and the World Bank Research Observer and Vice-President of LACEA, the Latin American and Caribbean Economist Association and a co-Chair of the World Economic Forum’s Global Future Council on the Future of Growth. She is also a Faculty Research Associate in the NBER International Finance and Macroeconomics (IFM) Program and the International Trade and Investment (ITI) Program, CEPR IFM program and co-Chair of the NBER’s Economics of Supply Chains conference, a joint effort with the Department of Homeland Security. Professor Alfaro is the author of multiple articles published in leading academic journals such as the American Economic Review, Review of Economic Studies, Journal of Political Economy, Journal of International Economics, and Harvard Business School cases related to the field of international economics and in particular international capital flows, foreign direct investment, sovereign debt, trade, and emerging markets. She is a member of the Latin-American Financial Regulatory Committee (CLAAF), the David Rockefeller Center for Latin American Studies (DRCLAS) policy committee, Faculty Associate at Harvard's Weatherhead Center for International Affairs, among others.
Professor Alfaro has taught in the first year and second year of the MBA program, the doctoral program, the General Management Program, the Program for Leadership Development, and in other executive education offerings. She earned her Ph.D. in Economics from the University of California, at Los Angeles (UCLA), where she received the Dissertation Fellowship award. She received a B.A in economics with honors from the Universidad de Costa Rica and a 'Licenciatura' from the Pontificia Universidad Católica of Chile where she graduated with the highest honors. She was awarded a Francisco Marroquin Foundation scholarship.
- Articles
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- Alfaro, Laura, and Davin Chor. "Global Supply Chains: The Looming 'Great Reallocation'." Harvard Business School Working Paper, No. 24-012, August 2023. (in proceedings Jackson Hole Symposium, 2023 (also NBER WP 31661). See feature in NBER Digest, Nov (2023): Economics, Politics, and the Evolution of Global Supply Chains.) View Details
- Alfaro, Laura, Nick Bloom, Paola Conconi, Harald Fadinger, Patrick Legros, Andrew F. Newman, Raffaella Sadun, and John Van Reenen. "Come Together: Firm Boundaries and Delegation." Journal of the European Economic Association 22, no. 1 (February 2024): 34–72. View Details
- Alfaro, Laura, Alejandro Cuñat, Harald Fadinger, and Yanping Liu. "The Real Exchange Rate, Innovation and Productivity." Journal of the European Economic Association 21, no. 2 (April 2023): 637–689. View Details
- Alfaro, Laura, and Fabio Kanczuk. "Undisclosed Debt Sustainability." AEA Papers and Proceedings 112 (May 2022): 521–525. View Details
- Alfaro, Laura, Ester Faia, Nora Lamersdorf, and Farzad Saidi. "Health Externalities and Policy: The Role of Social Preferences." Management Science 68, no. 9 (September 2022): 6751–6761. View Details
- Alfaro, Laura, Manuel García-Santana, and Enrique Moral-Benito. "On the Direct and Indirect Real Effects of Credit Supply Shocks." Journal of Financial Economics 139, no. 3 (March 2021): 895–921. View Details
- Alfaro, Laura, Maggie X. Chen, and Harald Fadinger. "Spatial Agglomeration and Superstar Firms: Firm-level Patterns from Europe and U.S." In ECB Forum on Central Banking, 17-19 June 2019, Sintra, Portugal: 20 years of European Economic and Monetary Union: Conference Proceedings. Frankfurt: European Central Bank, 2019. View Details
- Alfaro, Laura, Gonzalo Asis, Anusha Chari, and Ugo Panizza. "Corporate Debt, Firm Size and Financial Fragility in Emerging Markets." Journal of International Economics 118 (May 2019): 1–19. (Also NBER Working Paper 25459.) View Details
- Alfaro, Laura, Pol Antràs, Davin Chor, and Paola Conconi. "Internalizing Global Value Chains: A Firm-Level Analysis." Journal of Political Economy 127, no. 2 (April 2019): 508–559. (See Online Appendix. Replications files available here. Also NBER Working Paper 21582.) View Details
- Alfaro, Laura, and Fabio Kanczuk. "Debt Redemption and Reserve Accumulation." IMF Economic Review 67, no. 2 (June 2019): 261–287. (Also NBER Working Paper No. 19098.) View Details
- 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 18207. See Harvard Business School Working Paper, No. 12–111, 2015 for longer version.) View Details
- Alfaro, Laura, Anusha Chari, and Fabio Kanczuk. "The Real Effects of Capital Controls: Firm-Level Evidence from a Policy Experiment." Journal of International Economics 108 (September 2017): 191–210. (Also see NBER Working Paper 20726. See comment in Brookings Series: The Hutchins Roundup. See also, feature in NBER Digest March 2015 issue. ) View Details
- Alfaro, Laura, Paola Conconi, Harald Fadinger, and Andrew F. Newman. "Do Prices Determine Vertical Integration?" Review of Economic Studies 83, no. 3 (July 2016): 855–888. (Also NBER Working Paper 16118.) View Details
- Alfaro, Laura. "Gains from Foreign Direct Investment: Macro and Micro Approaches." World Bank Economic Review 30, Suppl. 1 (March 2017): S2–S15. (World Bank’s ABCDE Conference Keynote Presentation. Published early online March 23, 2016.) View Details
- Alfaro, Laura. "Sovereign Debt Restructuring: Evaluating the Impact of the Argentina Ruling." Harvard Business Law Review 5, no. 1 (Spring 2015): 47–71. View Details
- Alfaro, Laura, and Maggie Xiaoyang Chen. "The Global Agglomeration of Multinational Firms." Journal of International Economics 94, no. 2 (November 2014): 263–276. (Revised April 2014. Also NBER Working Paper Series, No. 15576. See Harvard Business School Working Paper, No. 10-043 for longer version.) View Details
- Alfaro, Laura, and Anusha Chari. "Deregulation, Misallocation, and Size: Evidence from India." Journal of Law & Economics 57, no. 4 (November 2014): 897–936. (Revised February 2014.) View Details
- Alfaro, Laura, Sebnem Kalemli-Ozcan, and Vadym Volosovych. "Sovereigns, Upstream Capital Flows and Global Imbalances." Journal of the European Economic Association 12, no. 5 (October 2014): 1240–1284. (Also NBER Working Paper 17396. Online Appendix. See International capital flows database for the data on measures of net private and public capital flows for a large cross-section of developing countries.) View Details
- Alfaro, Laura, and Maggie Chen. "Surviving the Global Financial Crisis: Foreign Ownership and Establishment Performance." American Economic Journal: Economic Policy 4, no. 3 (August 2012): 30–55. (Also NBER Working Paper No. 17141.) View Details
- Alfaro, Laura, and Fabio Kanczuk. "Nominal versus Indexed Debt: A Quantitative Horse Race." Journal of International Money and Finance 29, no. 8 (December 2010): 1706–1726. (Also Harvard Business School Working Paper No. 05-053 and NBER Working Paper No. 13131.) View Details
- Alfaro, Laura, Sebnem Kalemli-Ozcan, Areendam Chanda, and Selin Sayek. "Does Foreign Direct Investment Promote Growth? Exploring the Role of Financial Markets on Linkages." Journal of Development Economics 91, no. 2 (March 2010): 242–256. (Also Harvard Business School Working Paper No. 07-013 and NBER Working Paper No. w12522.) View Details
- Alfaro, Laura, and Anusha Chari. "India Transformed: Insights from the Firm Level 1988–2007." India Policy Forum 6 (2009). (Also NBER Working Paper w15448. Featured in The Economist. Economics focus. "Dancing elephants. Is Indian capitalism becoming oligarchic?" Jan 27th 2011.) View Details
- Alfaro, Laura, Andrew Charlton, and Fabio Kanczuk. "Plant-Size Distribution and Cross-Country Income Differences." In NBER International Seminar on Macroeconomics 2008, edited by Jeffrey A. Frankel and Christopher Pissarides. Cambridge, MA: National Bureau of Economic Research, 2009. View Details
- Alfaro, Laura, and Andrew Charlton. "Intra-Industry Foreign Direct Investment." American Economic Review 99, no. 5 (December 2009): 2096–2119. (Also Harvard Business School Working Paper No. 08-018 and NBER Working Paper No. 13447.) View Details
- Alfaro, Laura, and Fabio Kanczuk. "Debt Maturity: Is Long-Term Debt Optimal?" Review of International Economics 17, no. 5 (November 2009): 890–905. (Also Harvard Business School Working Paper, No. 06-005 and NBER Working Paper No. 13119.) View Details
- Alfaro, Laura, and Fabio Kanczuk. "Optimal Reserve Management and Sovereign Debt." Journal of International Economics 77, no. 1 (February 2009): 23–36. (Also Harvard Business School Working Paper, No. 07-010, 2006 and NBER Working Paper No. 13216.) View Details
- Alfaro, Laura, Sebnem Kalemli-Ozcan, and Selin Sayek. "FDI, Productivity, and Financial Development." Special Issue on Multinational Enterprises and Foreign Direct Investment. World Economy 32, no. 1 (January 2009): 111–135. View Details
- Alfaro, Laura, Sebnem Kalemli-Ozcan, and Vadym Volosovych. "Why Doesn't Capital Flow from Rich to Poor Countries? An Empirical Investigation." Review of Economics and Statistics 90, no. 2 (May 2008): 347–368. View Details
- Alfaro, Laura, and Eliza Hammel. "Capital Flows and Capital Goods." Journal of International Economics 72, no. 1 (May 2007): 128–150. (Link to working paper version.) View Details
- Alfaro, Laura, and Fabio Kanczuk. "Sovereign Debt As a Contingent Claim: A Quantitative Approach." Journal of International Economics 65, no. 2 (March 2005). View Details
- Alfaro, Laura. "Inflation, Openness, and Exchange Rate Regimes: The Quest for Short-Term Commitment." Journal of Development Economics 77, no. 1 (June 2005): 229–249. View Details
- Alfaro, Laura, Areendam Chanda, Sebnem Kalemli-Ozcan, and Selin Sayek. "FDI and Economic Growth: The Role of Local Financial Markets." Journal of International Economics 64, no. 1 (October 2004): 89–112. View Details
- Alfaro, Laura, and Andres Rodriguez-Clare. "Multinationals and Linkages: An Empirical Investigation." Economía (spring 2004). View Details
- Alfaro, Laura. "Capital Controls: A Political Economy Approach." Review of International Economics 12, no. 4 (September 2004): 571–590. View Details
- Alfaro, Laura, and Fabio Kanczuk. "Capital Controls, Risk and Liberalization Cycles." Review of International Economics 12, no. 3 (August 2004): 412–434. View Details
- Alfaro, Laura. "On the Political Economy of Temporary Stabilization Programs." Economics & Politics 14, no. 2 (July 2002): 133–161. View Details
- Book Chapters
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- Alfaro, Laura. "Discussion of Geoeconomic Fragmentation and the Future of Multilateralism." Chap. 2 in Geoeconomic Fragmentation: The Economic Risks from a Fractured World Economy, by Shekhar Aliyar, Andrea Presbitero, and Michele Ruta, 19–25. Centre for Economic Policy Research (CEPR), 2023. View Details
- Alfaro, Laura, and Fabio Kanczuk. "El problema de la productividad [The Productivity Problem]." Chap. 3 in El desafío del desarrollo en América Latina. Políticas para una región más productiva, integrada e inclusiva [The Challenge of Development in Latin America: Policies for a More Productive, Integrated and Inclusive Region], 85–123. Caracas, Venezuela: CAF – Banco de Desarrollo de América Latina, 2020, Spanish ed. View Details
- Alfaro, Laura, Oscar Becerra, and Marcela Eslava. "Colombia's Employment Exposure to COVID-19." In COVID-19. Effects and Challenges. Universidad de los Andes, forthcoming. (See application of the methodology to Latin American Countries in the IMF Regional Economic Outlook: Western Hemisphere 2020, Chapter 3.) View Details
- Alfaro, Laura. "The Pandemic Can Be Used as a Cover for Wasteful Spending." In Latin America: The Post-Pandemic Decade. Conversations with 16 Latin American Economists, edited by Ilan Goldfajn and Eduardo Levy Yeyati. London: CEPR Press, 2021. View Details
- Alfaro, Laura, and Fabio Kanczuk. "El problemo de la productividad." In El desafío del desarrollo en América Latina: Políticas para una región más productiva, integrada e inclusiva, edited by Corporación Andina de Fomento (CAF). Caracas: Development Bank of Latin America, 2020. View Details
- Alfaro, Laura, and Fabio Kanczuk. "Reserve Accumulation, Sovereign Debt, and Exchange Rate Policy." In Asset Management at Central Banks and Monetary Authorities: New Practices in Managing International Foreign Exchange Reserves, edited by Jacob Bjorheim. Springer, 2020. (Book link.) View Details
- Alfaro, Laura, and Jasmina Chauvin. "Foreign Direct Investment, Finance and Economic Development." In Encyclopedia of International Economics and Global Trade, Vol. 1: Foreign Direct Investment and the Multinational Enterprise, edited by Mariana Spatareanu, 231–258. World Scientific, 2020. View Details
- Alfaro, Laura, and Maggie Xiaoyang Chen. "Location Fundamentals, Agglomeration Economies, and the Geography of Multinational Firms." Chap. 10 in The Oxford Handbook of Structural Transformation, edited by Célestin Monga and Justin Yifu Lin. Oxford University Press, 2019. View Details
- Alfaro, Laura. "Multinational Activity in Emerging Markets: How and When Does Foreign Direct Investment Promote Growth?" In Geography, Location, and Strategy. Vol. 36, edited by Juan Alcácer, Bruce Kogut, Catherine Thomas, and Bernard Yin Yeung, 429–462. Advances in Strategic Management. Emerald Publishing Limited, 2017. View Details
- Alfaro, Laura, and Maggie Chen. "Transportation Cost and the Geography of Foreign Investment." In Handbook of International Trade and Transportation, edited by Bruce Blonigen and Wesley W. Wilson. Edward Elgar Publishing, 2018. View Details
- Alfaro, Laura. "Foreign Direct Investment: Effects, Complementarities, and Promotion." Chap. 2 in Partners or Creditors? Attracting Foreign Investment and Productive Development to Central America and Dominican Republic, edited by Osmel Manzano, Sebastián Auguste, and Mario Cuevas, 21–76. Inter-American Development Bank, 2015. (Also in Spanish: ¿Socios o Acreedores? Atracción de Inversión Extranjera y Desarrollo Productivo en Mesoamérica.) View Details
- Alfaro, Laura, and Andrew Charlton. "Growth and the Quality of Foreign Direct Investment: Is All FDI Equal?" In The Industrial Policy Revolution I: The Role of Government Beyond Ideology. no. 151-1, edited by Joseph E. Stiglitz and Justin Lin Yifu. IEA Conference Volume. London: Palgrave Macmillan, 2013. View Details
- Alfaro, Laura, and Anusha Chari. "Reforms and the Competitive Environment." Chap. 8 in Reforms and Economic Transformation in India. 2, edited by Jagdish N. Bhagwati and Arvind Panagariya. Studies in Indian Economic Policies. Oxford University Press, 2012. View Details
- Alfaro, L., and M. S. Johnson. "Foreign Direct Investment and Growth." Chap. 20 in The Evidence and Impact of Financial Globalization, edited by Gerard Caprio, 299–309. Elsevier, 2012. View Details
- Alfaro, Laura, Sebnem Kalemli-Ozcan, and Vadym Volosovych. "Capital Flows in a Globalized World: The Role of Policies and Institutions." In Capital Controls and Capital Flows in Emerging Economies: Policies, Practices, and Consequences, edited by Sebastian Edwards. National Bureau of Economic Research Conference Report. University of Chicago Press, 2007. (Also NBER Working Paper No. 11696.) View Details
- Alfaro, Laura, and Eliza Hammel. "Latin American Multinationals." In The Latin American Competitiveness Report. New York: Oxford University Press, 2006. (Issued by WEF/CID.) View Details
- Working Papers
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- Alfaro, Laura, Saleem Bahaj, Robert Czech, Jonathan Hazell, and Ioana Neamtu. "LASH Risk and Interest Rates." Bank of England Staff Working Papers, No. 1,073, May 2024. View Details
- Alfaro, Laura, Maggie X. Chen, and Davin Chor. "Can Evidence-Based Information Shift Preferences Towards Trade Policy?" Harvard Business School Working Paper, No. 22-062, March 2022. (Revised May 2023. NBER Working Paper Series, No. 31240, May 2023) View Details
- Alfaro, Laura, Cathy Bao, Maggie X. Chen, Junjie Hong, and Claudia Steinwender. "Omnia Juncta in Uno: Foreign Powers and Trademark Protection in Shanghai's Concession Era." Harvard Business School Working Paper, No. 22-030, November 2021. (Revised July 2024.) View Details
- Alfaro, Laura, Mauricio Calani, and Liliana Varela. "Granular Corporate Hedging Under Dominant Currency." NBER Working Paper Series, No. 28910, June 2021. (Revised July 2022.) View Details
- Alfaro, Laura, Anusha Chari, Andrew Greenland, and Peter K. Schott. "Aggregate and Firm-Level Stock Returns During Pandemics, in Real Time." NBER Working Paper Series, No. 26950, April 2020. (Revised May 2020.) View Details
- Acosta-Henao, Miguel, Laura Alfaro, and Andres Fernandez. "Sticky Capital Controls." NBER Working Paper Series, No. 26997, April 2020. View Details
- Alfaro, Laura, and Fabio Kanczuk. "Fiscal Rules and Sovereign Default." Harvard Business School Working Paper, No. 16-134, June 2016. (Also NBER Working Paper w23370. Revised January 2019.) View Details
- Other Publications, Comments, and Book Reviews
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- Alfaro, Laura, and Davin Chor. "A Perspective on the Great Reallocation of Global Supply Chains." Vox, CEPR Policy Portal (September 28, 2023). View Details
- Alfaro, Laura. "Costa Rica, the Dominican Republic, and Panama: A New Alliance for Promoting Democracy and Prosperity in the Americas." Government Testimony, U.S. House of Representatives, Foreign Affairs Committee, Subcommittee on the Western Hemisphere, Civilian Security, Migration, and International Economic Policy, January 2022. View Details
- Alfaro, Laura, and Paul R. Bergin. "Introduction To: The Euro at Twenty." Review of World Economics 155, no. 1 (February 2019). View Details
- Alfaro, Laura, Alejandro Cuñat, Harald Fadinger, and Yanping Liu. "You Can't Always Get What You Want: The Real Exchange Rate and Manufacturing Performance in a World of Global Value Chains." Vox, CEPR Policy Portal (October 2, 2018). View Details
- Alfaro, Laura, Nicholas Bloom, Paola Conconi, Harald Fadinger, Patrick Legros, Andrew Newman, Raffaella Sadun, and John Van Reenen. "Ownership and Power Structure: Together at Last." Vox, CEPR Policy Portal (September 26, 2018). View Details
- Alfaro, Laura, Manuel García-Santana, and Enrique Moral-Benito. "On the Direct and Indirect Real Effects of Credit Supply Shocks." Journal of Financial Economics 139, no. 3 (March 2021): 895–921. View Details
- Alfaro, Laura. "Book Review of Israel and the World Economy: The Power of Globalization, by Assaf Razin." Israel Economic Review 15, no. 1 (2018): 111–115. View Details
- Alfaro, Laura, Holger Görg, and Adnan Seric. "Introduction to the Symposium: Attracting and Benefitting from Quality FDI." Review of World Economics 153, no. 4 (November 2017). View Details
- Ahmed, Faisal Z., and Laura Alfaro. "Market Reactions to Sovereign Litigation." Capital Markets Law Journal 12, no. 2 (April 2017): 141–163. View Details
- Alfaro, Laura, Gonzalo Asis, Anusha Chari, and Ugo Panizza. "Corporate Balance Sheets in Emerging Markets: A Comparison of the Global Crisis and the Asian Financial Crisis." Vox, CEPR Policy Portal (June 12, 2017). View Details
- Alfaro, Laura. "Multinational Firms, Value Chains, and Vertical Integration." NBER Reporter, no. 3 (2016). (Research Summary.) View Details
- Alfaro, Laura, Pol Antràs, Davin Chor, and Paola Conconi. "Make or Buy Decisions Over Upstream and Downstream Inputs: An Investigation of Firm Boundaries Along Value Chains." Vox, CEPR Policy Portal (November 14, 2015). View Details
- Alfaro, Laura, Anusha Chari, and Fabio Kanczuk. "Are Capital Controls Effective? Firm-level Evidence from Brazil." Vox, CEPR Policy Portal (January 22, 2015). View Details
- Alfaro, Laura, and Fabio Kanczuk. "Pseudo-flexible Exchange-rate Regimes." Vox, CEPR Policy Portal (July 15, 2013). View Details
- Alfaro, Laura, Paola Conconi, Harald Fadinger, Patrick Legros, and Andrew Newman. "Firm Organisation: What We Know and Why We Should Care." Vox, CEPR Policy Portal (December 2, 2012). View Details
- Alfaro, Laura, Sebnem Kalemli-Ozcan, and Vadym Volosovych. "Upstream Sovereigns." Vox, CEPR Policy Portal (October 29, 2011). View Details
- Ahmed, Faisal Z., Laura Alfaro, and Noel Maurer. "Lawsuits and Empire: On the Enforcement of Sovereign Debt in Latin America." Law and Contemporary Problems 73, no. 4 (fall 2010): 39–46. View Details
- Alfaro, Laura, and Maggie Chen. "Multinational Firms, Agglomeration, and Global Networks." Vox, CEPR Policy Portal (January 8, 2010). View Details
- Alfaro, Laura, and Anusha Chari. "The Transformation of India: Incumbent Control, Reforms, and Newcomers." Vox, CEPR Policy Portal (December 12, 2009). View Details
- Alfaro, Laura, Lakshmi Iyer, and Semil Shah. "India's Pockets of Prosperity? Special Economic Zones Are Attractive on Paper, But They Pose Thorny Political Problems." Opinion. Christian Science Monitor (July 31, 2009). View Details
- Alfaro, Laura. "Review of 'Foreign Direct Investment: Analysis of Aggregate Flows' by A. Razin and E. Sadka." Journal of Economic Literature 47, no. 1 (March 2009): 187–190. View Details
- Alfaro, Laura. Comments on "How to Investigate the Impact of Foreign Direct Investment on Development, and Use the Results to Guide Policy," by Theodore H. Moran. Brookings Trade Forum (2007): 40–53. View Details
- Alfaro, Laura. Review of "The Monetary Geography of Africa," by Paul R. Masson and Catherine Patillo. Journal of International Economics 67, no. 2 (December 2005): 515–520. View Details
- Abdelal, Rawi, and Laura Alfaro. "Capital and Control: Lessons from Malaysia." Challenge 46, no. 4 (July–August 2003): 36–53. (Also published in French as "Contrôle des capitaux: les enseignements de l’expérience malaisienne." Problèmes économiques, no. 2,837 (December 2003), pp. 21-28.) View Details
- Alfaro, Laura. "Comment on 'Integration, Interdependence and Regional Goods' by A. Bevilaqua, M. Catena and E. Talvi." Economía: Journal of the Latin American and Caribbean Economic Association 2, no. 1 (Fall 2001): 202–205. View Details
- Alfaro, Laura. "Why Governments Implement Temporary Stabilization Programs." Journal of Applied Economics 2, no. 2 (November 1999). View Details
- Statements CLAAF
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- Alfaro, Laura, Guillermo Calvo, José de Gregorio, Augusto de la Torre, Roque Fernandez, Pablo Guidotti, Enrique Mendoza, Ernesto Talvi, Liliana Rojas-Suarez, and Andrés Velasco. "Urgent: The IMF Must Reform." Comité Latinoamericano de Asuntos Financieros (CLAAF) Statement, 46, June 2023. View Details
- Alfaro, Laura, Guillermo Calvo, Augusto de la Torre, José de Gregorio, Roque Fernandez, Pablo Guidotti, Paulo Leme, Enrique Mendoza, Ernesto Talvi, Liliana Rojas-Suarez, and Andrés Velasco. "Fiscal Policy at a Time of Polarization: Addressing Latin America’s Tough Dilemmas." Comité Latinoamericano de Asuntos Financieros (CLAAF) Statement, No. 44, June 2021. View Details
- Alfaro, Laura, Guillermo Calvo, Augusto de la Torre, Jose de Gregorio, Roque Benjamin Fernandez, Pablo Guidotti, Paulo Leme, Enrique Mendoza, Liliana Rojas-Suarez, and Andres Velasco. "The COVID-19 Attack on Latin America: Proposals for an Effective Response." Comité Latinoamericano de Asuntos Financieros (CLAAF) Statement, No. 43, July 2020. View Details
- Alfaro, Laura, Augusto de la Torre, Guillermo Calvo, Roque Benjamin Fernandez, Pablo Guidotti, Paulo Leme, Enrique Mendoza, Guillermo Perry, Carmen Reinhart, and Liliana Rojas-Suarez. "Mexico's Financial Risks: Solving Pemex for a Solvent Mexico." Comité Latinoamericano de Asuntos Financieros (CLAAF) Statement, no. 41, July 2019. View Details
- Alfaro, Laura, Guillermo Calvo, Alberto Carrasquilla, Augusto de la Torre, Roque Benjamin Fernandez, Pablo Guidotti, Enrique Mendoza, Guillermo Perry, and Liliana Rojas-Suarez. "Latin America's Policy Options for Times of Protectionism." Comité Latinoamericano de Asuntos Financieros (CLAAF) Statement, no. 37, April 2017. (See Project Syndicate article and CLAAF 's website for previous statements.) View Details
- 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
- Alfaro, Laura, Guillermo Calvo, Alberto Carrasquilla, Augusto de la Torre, Roque Benjamin Fernandez, Pablo Guidotti, Enrique Mendoza, Guillermo Perry, and Liliana Rojas-Suarez. "Latin America's Options for Times of Protectionism." Comité Latinoamericano de Asuntos Financieros (CLAAF) Statement, No. 37, April 2017. View Details
- Alfaro, Laura, Guillermo Calvo, Alberto Carrasquilla, Pedro Carvalho de Mello, Roque Benjamin Fernandez, Pablo Guidotti, Guillermo Perry, Enrique Mendoza, Liliana Rojas-Suarez, and Ernesto Talvi. "Argentina's Challenging Path to More Open Markets." Comité Latinoamericano de Asuntos Financieros (CLAAF) Statement, No. 35, April 2016. (See CLAAF’s website for previous statements.) View Details
- Alfaro, Laura, Guillermo Calvo, Pedro Carvalho de Mello, Roque Benjamin Fernandez, Pablo Guidotti, Enrique Mendoza, Guillermo Perry, Carmen Reinhart, Liliana Rojas-Suarez, and Ernesto Talvi. "Latin America: Back to the 1980s or Heading for Rebound?" Comité Latinoamericano de Asuntos Financieros (CLAAF) Statement, No. 34, November 2015. (See CLAAF’s website for previous statements.) View Details
- Alfaro, Laura, Guillermo Calvo, Pedro Carvalho de Mello, Pablo Guidotti, Guillermo Perry, Carmen Reinhart, Liliana Rojas-Suarez, and Ernesto Talvi. "The End of a Cycle in Latin America and Its Associated Risks." Comité Latinoamericano de Asuntos Financieros (CLAAF) Statement, no. 33, March 2015. (See CLAAF 's website for previous statements.) View Details
- Alfaro, Laura, Guillermo Calvo, Alberto Carrasquilla, Pedro Carvalho de Mello, Pedro De Gregorio, Roque Benjamin Fernandez, Pablo Guidotti, Guillermo Perry, Carmen Reinhart, Liliana Rojas-Suarez, and Ernesto Talvi. "Enter the Dragon: Risks from China to Latin America." Comité Latinoamericano de Asuntos Financieros (CLAAF) Statement, no. 31, June 2014. (See CLAAF 's website for previous statements.) View Details
- Case Book, Course Notes, and Tutorials
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- Alfaro, Laura, and Elizabeth A. Meyer. "International Macroeconomics — An Online Tutorial." Harvard Business School Teaching Note 715-048, April 2015. View Details
- Alfaro, Laura, and Elizabeth A. Meyer. Introduction to International Macroeconomics. Harvard Business School Tutorial 715-702, April 2015. View Details
- Alfaro, Laura. Global Capital and National Institutions: Crisis and Choice in the International Financial Architecture. Singapore: World Scientific Publishing, 2010. View Details
- Alfaro, Laura. "Globalization Meets National Institutions: International Capital Flows, Harvard Business School Module Note Instructor Only, 708-041." 2008. View Details
- Alfaro, Laura, and Elizabeth A. Meyer. "Introduction to International Macroeconomics." Harvard Business School Course Overview Note 714-050, February 2014. (Revised August 2014.) (Also available as tutorial.) View Details
- Cases and Teaching Materials
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- Alfaro, Laura, Hise O. Gibson, Leonard A. Schlesinger, and Pedro Levindo. "Doing Business in São Paulo, Brazil." Harvard Business School Case 324-079, March 2024. View Details
- Alfaro, Laura, and Richard Vietor. "Deficits and Debt: The U.S. Current Account." Harvard Business School Teaching Note 324-122, May 2024. View Details
- Alfaro, Laura, Leonard A. Schlesinger, and Zeke Gillman. "Doing Business in Boston, Massachusetts." Harvard Business School Case 323-088, February 2023. (Revised March 2024.) View Details
- Alfaro, Laura, and Tom Quinn. "FIELD Immersion 2022: Lawrence, Massachusetts." Harvard Business School Background Note 322-108, July 2022. View Details
- Alfaro, Laura, Carla Larangeira, and Ruth Costas. "El Salvador: Launching Bitcoin as Legal Tender." Harvard Business School Case 322-055, March 2022. (Revised February 2024.) View Details
- Alfaro, Laura, and Richard Vietor. "Deficits and Debt: The U.S. Current Account." Harvard Business School Case 322-044, October 2021. (Revised February 2024.) View Details
- Alfaro, Laura. "Latam Airlines and COVID-19: Seeking Bankruptcy Protection in the United States." Harvard Business School Teaching Note 321-080, November 2020. View Details
- Alfaro, Laura, Mauricio Larrain, Carlos Vilches, and Sarah Jeong. "Latam Airlines and COVID-19: Seeking Bankruptcy Protection in the United States." Harvard Business School Case 321-027, August 2020. (Revised December 2020.) View Details
- Alfaro, Laura, and Sarah Jeong. "COVID-19: The Global Shutdown." Harvard Business School Teaching Note 321-021, July 2020. View Details
- Alfaro, Laura, and Sarah Jeong. "COVID-19: The Global Shutdown." Harvard Business School Case 320-108, May 2020. (Revised July 2020.) View Details
- Alfaro, Laura, and Sarah Jeong. "Brexit: A Withdrawal Agreement? — Boris Johnson." Harvard Business School Supplement 320-081, January 2020. View Details
- Alfaro, Laura, and Sarah Jeong. "Chile: Unrest in the Copper Nation." Harvard Business School Teaching Note 320-054, January 2020. View Details
- Alfaro, Laura, and Sarah Jeong. "Floating the Exchange Rate: In Pursuit of the Chinese Dream." Harvard Business School Case 320-039, November 2019. View Details
- Alfaro, Laura, and Sarah Jeong. "Chile: Unrest in the Copper Nation." Harvard Business School Case 320-051, November 2019. View Details
- Alfaro, Laura, and Sarah Jeong. "Renegotiating NAFTA." Harvard Business School Teaching Note 319-096, February 2019. (Revised January 2020.) View Details
- Alfaro, Laura, Laura Phillips Sawyer, and Haviland Sheldahl-Thomason. "Rebuilding Puerto Rico." Harvard Business School Case 719-018, November 2018. (Revised October 2019.) View Details
- Alfaro, Laura, and Sarah Jeong. "Brexit: A Withdrawal Agreement? - Theresa May." Harvard Business School Supplement 319-086, January 2019. (Revised December 2019.) View Details
- Alfaro, Laura, Christian Ketels, Haviland Sheldahl-Thomason, Sarah Jeong, and Marcin Piatkowski. "Poland at a Crossroads." Harvard Business School Case 319-065, October 2018. (Revised October 2019.) View Details
- Alfaro, Laura, Haviland Sheldahl-Thomason, and Sarah Jeong. "Renegotiating NAFTA." Harvard Business School Case 318-143, June 2018. (Revised January 2020.) View Details
- Alfaro, Laura, and Haviland Sheldahl-Thomason. "Lisbon Revisited." Harvard Business School Case 718-039, February 2018. View Details
- Alfaro, Laura, and Richard H.K. Vietor. "The U.S. Shale Revolution: Global Rebalancing?" Harvard Business School Case 717-056, April 2017. (Revised August 2018.) View Details
- Alfaro, Laura, and Hayley Pallan. "The Productivity Decline: Demographics, Robots, or Globalization?" Harvard Business School Teaching Note 718-014, September 2017. View Details
- Alfaro, Laura, Hayley Pallan, and Sarah Jeong. "The Productivity Decline: Demographics, Robots, or Globalization?" Harvard Business School Case 718-013, September 2017. (Revised August 2018.) View Details
- Alfaro, Laura, Jesse Schreger, and Haviland Sheldahl-Thomason. "Brexit." Harvard Business School Teaching Note 718-004, July 2017. View Details
- Alfaro, Laura, and Haviland Sheldahl-Thomason. "Colombia: the National System for Competitiveness and Innovation." Harvard Business School Supplement 717-031, December 2016. (Revised January 2017.) View Details
- Alfaro, Laura, Christian Ketels, Marcela Merino Dominguez, and Haviland Sheldahl-Thomason. "Naranya: Created in Mexico." Harvard Business School Case 716-062, February 2016. (Revised April 2020.) View Details
- Alfaro, Laura, Jesse Schreger, and Haviland Sheldahl-Thomason. "Brexit." Harvard Business School Case 717-028, November 2016. (Revised March 2018.) View Details
- Alfaro, Laura, Christian Ketels, Haviland Sheldahl-Thomason, and Marcela Merino Dominguez. "Naranya: Created in Mexico." Harvard Business School Teaching Note 717-002, August 2016. View Details
- Alfaro, Laura, Rafael Di Tella, Ingrid Vogel, Renee Kim, Sarah Jeong, Matthew Johnson, and Jonathan Schlefer. "The U.S. Current Account Deficit." Harvard Business School Case 706-002, July 2005. (Revised September 2020.) View Details
- Alfaro, Laura, Lakshmi Iyer, and Hilary White. "The United Kingdom and the Means to Prosperity." Harvard Business School Teaching Note 715-055, May 2015. View Details
- Alfaro, Laura, and Hilary White. "Japan's Missing Arrow?" Harvard Business School Case 715-050, April 2015. (Revised January 2020.) View Details
- Alfaro, Laura, Lakshmi Iyer, and Hilary White. "The United Kingdom and the Means to Prosperity." Harvard Business School Case 715-008, September 2014. (Revised May 2015.) View Details
- Alfaro, Laura, and Lakshmi Iyer. "Special Economic Zones in India: Public Purpose and Private Property (A)." Harvard Business School Case 709-027, December 2008. (Revised October 2012.) View Details
- Alfaro, Laura, Lakshmi Iyer, and Namrata Arora. "Tata Motors in Singur: Public Purpose and Private Property (B)." Harvard Business School Case 709-029, February 2009. (Revised October 2012.) View Details
- Alfaro, Laura, and Lakshmi Iyer. "Public Purpose and Private Property (TN) (A) and (B)." Harvard Business School Teaching Note 709-028, March 2009. View Details
- Alfaro, Laura, Lakshmi Iyer, and Rachna Tahilyani. "Land Acquisition in India: Public Purpose and Private Property (C)." Harvard Business School Supplement 714-023, December 2013. (Revised May 2015.) View Details
- Vietor, Richard H.K., and Laura Alfaro. "The U.S. Shale Revolution: Global Rebalancing?" Harvard Business School Teaching Note 714-052, April 2014. View Details
- Alfaro, Laura, Hilary White, and Haviland Sheldahl-Thomason. "Brazil's Enigma: Sustaining Long-Term Growth." Harvard Business School Case 713-040, October 2012. (Revised April 2017.) View Details
- Alfaro, Laura, and Hilary White. "Brazil's Enigma: Sustaining Long-Term Growth & Currency Wars." Harvard Business School Teaching Note 713-092, June 2013. (Revised June 2013.) View Details
- Alfaro, Laura, and Hilary White. "Currency Wars." Harvard Business School Case 713-074, March 2013. View Details
- Alfaro, Laura, Richard H.K. Vietor, and Hilary White. "Australia: Commodities and Competitiveness (TN)." Harvard Business School Teaching Note 713-063, February 2013. View Details
- Vietor, Richard H.K., and Laura Alfaro. "Australia: Commodities, Competitiveness, Climate and China." Harvard Business School Case 720-028, August 2012. (Revised June 2017.) View Details
- Alfaro, Laura, Dante Roscini, and Renee Kim. "Chile's Copper Surplus: The Road Not Taken (A)." Harvard Business School Case 710-019, March 2010. (Revised May 2013.) View Details
- Alfaro, Laura, Dante Roscini, and Renee Kim. "Chile's Copper Surplus: The Road Not Taken (B)." Harvard Business School Supplement 710-020, March 2010. (Revised May 2013.) View Details
- Porte, Thierry, Rawi E. Abdelal, Laura Alfaro, and Jonathan Schlefer. "Crisis and Reform in Japan's Banking System (A)." Harvard Business School Case 710-036, November 2009. (Revised June 2012.) View Details
- Porte, Thierry, Rawi E. Abdelal, Laura Alfaro, and Jonathan Schlefer. "Crisis and Reform in Japan's Banking System (B)." Harvard Business School Supplement 710-037, November 2009. (Revised June 2012.) View Details
- Alfaro, Laura, and Renee Kim. "Australia: The Riches and Challenges of Commodities." Harvard Business School Case 709-007, June 2009. (Revised May 2013.) View Details
- Alfaro, Laura, and Renee Kim. "Australia: The Riches and Challenges of Commodities (TN)." Harvard Business School Teaching Note 710-066, June 2010. View Details
- Alfaro, Laura, and Renee Kim. "The First Global Financial Crisis of the 21st Century." Harvard Business School Case 709-057, April 2009. View Details
- Alfaro, Laura, and Renee Kim. "U.S. Subprime Mortgage Crisis: Policy Reactions (A)." Harvard Business School Case 708-036, March 2008. (Revised July 2009.) View Details
- Alfaro, Laura, and Renee Kim. "U.S. Subprime Mortgage Crisis: Policy Reactions (B)." Harvard Business School Case 709-045, April 2009. (Revised June 2010.) View Details
- Alfaro, Laura, and Renee Kim. "U.S. Subprime Mortgage Crisis: Policy Reactions (TN) (A) and (B)." Harvard Business School Teaching Note 710-003, August 2009. View Details
- Alfaro, Laura, and Renee Kim. "Sovereign Wealth Funds: For Profits or Politics?" Harvard Business School Case 708-053, May 2008. (Revised July 2009.) View Details
- Alfaro, Laura, and Akiko Kanno. "Kinyuseisaku: Monetary Policy in Japan (A)." Harvard Business School Case 708-017, January 2008. (Revised April 2009.) View Details
- Alfaro, Laura, and Akiko Kanno. "Kinyuseisaku: Monetary Policy in Japan (B)." Harvard Business School Supplement 709-056, March 2009. (Revised May 2013.) View Details
- Alfaro, Laura, and Hilary White. "Kinyuseisaku: Monetary Policy in Japan (C)." Harvard Business School Supplement 713-086, May 2013. View Details
- Alfaro, Laura, and Renee Kim. "Kinyuseisaku: Monetary Policy in Japan (TN) (A) & (B)." Harvard Business School Teaching Note 708-028, January 2008. (Revised March 2009.) View Details
- Alfaro, Laura, Rafael Di Tella, and Renee Kim. "Chronology of the Asian Financial Crisis." Harvard Business School Case 708-001, February 2008. (Revised April 2009.) View Details
- Alfaro, Laura, and Renee Kim. "Transforming Korea Inc: Financial Crisis and Institutional Reform." Harvard Business School Case 708-007, October 2007. (Revised May 2008.) View Details
- Alfaro, Laura, and Renee Kim. "Transforming Korea Inc: Financial Crisis and Institutional Reform (TN)." Harvard Business School Teaching Note 708-027, October 2007. View Details
- Alfaro, Laura, Rafael M. Di Tella, and Renee Kim. "Korea: After the 1997 Financial Crisis." Harvard Business School Case 707-042, March 2007. (Revised January 2008.) View Details
- Alfaro, Laura, and Ingrid Vogel. "Creditor Activism in Sovereign Debt: 'Vulture' Tactics or Market Backbone." Harvard Business School Case 706-057, June 2006. (Revised April 2024.) View Details
- Alfaro, Laura, and Ingrid Vogel. Creditor Activism in Sovereign Debt: "Vulture" Tactics or Market Backbone (TN). Harvard Business School Teaching Note 708-010, August 2007. View Details
- Alfaro, Laura, and Ingrid Vogel. "International Capital Markets and Sovereign Debt: Crisis Avoidance and Resolution." Harvard Business School Background Note 707-018, November 2006. (Revised May 2007.) View Details
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- Alfaro, Laura, Eric D. Werker, and Renee Kim. "Aid, Debt Relief, and Trade: An Agenda for Fighting World Poverty (B)." Harvard Business School Supplement 707-040, April 2007. (Revised July 2007.) View Details
- Alfaro, Laura, Eric D. Werker, and Renee Kim. "Aid, Debt Relief, and Trade: An Agenda for Fighting World Poverty (TN) (A) and (B)." Harvard Business School Teaching Note 707-049, June 2007. (Revised February 2008.) View Details
- Di Tella, Rafael M., Laura Alfaro, and Ezequiel Reficco. "Bolivia and Evo Morales." Harvard Business School Case 707-041, February 2007. View Details
- Alfaro, Laura, Rafael M. Di Tella, Ane Damgaard Jensen, and Vincent Marie Dessain. "Rovna Dan: The Flat Tax in Slovakia." Harvard Business School Case 707-043, March 2007. (Revised March 2010.) View Details
- Alfaro, Laura, Rafael M. Di Tella, and Renee Kim. "Rovna Dan: The Flat Tax in Slovakia (TN)." Harvard Business School Teaching Note 708-003, October 2007. View Details
- Alfaro, Laura, Vinati Dev, and Stephen McIntyre. "Foreign Direct Investment and Ireland's Tiger Economy (A)." Harvard Business School Case 706-007, July 2005. (Revised March 2010.) View Details
- 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.) View Details
- Alfaro, Laura. "Foreign Direct Investment and Ireland's Tiger Economy (TN) (A) and (B)." Harvard Business School Teaching Note 706-025, December 2005. (Revised March 2010.) View Details
- Alfaro, Laura, Vincent Marie Dessain, and Patrick Vachey. "French Unemployment: The Crisis Continues." Harvard Business School Supplement 707-020, October 2006. (Revised July 2007.) View Details
- Alfaro, Laura, Rafael M. Di Tella, Ingrid Vogel, and Renee Kim. "The U.S. Current Account Deficit (TN)." Harvard Business School Teaching Note 706-008, August 2005. (Revised December 2008.) View Details
- Alfaro, Laura, Rafael M. Di Tella, and Ingrid Vogel. "The U.S. Current Account Deficit (CW)." Harvard Business School Spreadsheet Supplement 706-701, August 2005. View Details
- Alfaro, Laura, Rafael M. Di Tella, and Ingrid Vogel. "China: To Float or Not To Float? (A)." Harvard Business School Case 706-021, March 2006. (Revised April 2010.) View Details
- Alfaro, Laura, and Rafael M. Di Tella. "China: To Float or Not To Float? (B)- Timeline of Changes Relevant to the Chinese Renminbi." Harvard Business School Case 706-022, March 2006. (Revised April 2015.) View Details
- Alfaro, Laura, Rafael M. Di Tella, and Ingrid Vogel. "China: To Float or Not To Float? (C)- Esquel Group and the Chinese Renminbi." Harvard Business School Case 706-023, March 2006. (Revised November 2006.) View Details
- Alfaro, Laura, Rafael M. Di Tella, and Ingrid Vogel. "China: To Float or Not To Float? (D)- Bank of America's Strategic Investment in China Construction Bank." Harvard Business School Case 706-031, March 2006. (Revised November 2006.) View Details
- Alfaro, Laura, Rafael M. Di Tella, and Ingrid Vogel. "China: To Float or Not To Float? (E)- ABB Investment in China." Harvard Business School Case 706-035, March 2006. (Revised November 2006.) View Details
- Alfaro, Laura, Rafael M. Di Tella, and Ingrid Vogel. "China: To Float or Not To Float? (F)- Alcatel and Strong Chinese Competition." Harvard Business School Case 706-036, May 2006. (Revised November 2006.) View Details
- Alfaro, Laura, Rafael M. Di Tella, and Ingrid Vogel. "To Float or Not to Float? In Pursuit of the Chinese Dream." Harvard Business School Teaching Note 706-060, May 2006. (Revised November 2019.) View Details
- Alfaro, Laura, Rafael M. Di Tella, and Ingrid Vogel. "Capital Controls in Chile in the 1990s (A)." Harvard Business School Case 705-031, March 2005. (Revised July 2007.) View Details
- Alfaro, Laura, Rafael M. Di Tella, and Ingrid Vogel. "Capital Controls in Chile in the 1990s (B)." Harvard Business School Case 705-032, March 2005. (Revised June 2005.) View Details
- Alfaro, Laura, Rafael M. Di Tella, and Ingrid Vogel. "Capital Controls in Chile in the 1990's (A & B) (TN)." Harvard Business School Teaching Note 705-039, May 2005. (Revised February 2008.) View Details
- Alfaro, Laura, Rafael M. Di Tella, and Ingrid Vogel. "Brazil 2003: Inflation Targeting and Debt Dynamics." Harvard Business School Case 704-028, February 2004. (Revised March 2010.) View Details
- Alfaro, Laura, and Rafael Di Tella. "Brazil 2003: Inflation Targeting and Debt Dynamics (Abridged) ." Harvard Business School Case 713-041, October 2012. View Details
- Alfaro, Laura, Rafael M. Di Tella, and Ingrid Vogel. "Brazil 2003: Inflation Targeting and Debt Dynamics (TN)." Harvard Business School Teaching Note 704-039, May 2004. (Revised July 2008.) View Details
- Abdelal, Rawi E., and Laura Alfaro. "Malaysia: Capital and Control." Harvard Business School Case 702-040, April 2002. (Revised April 2003.) View Details
- Abdelal, Rawi E., and Laura Alfaro. "Malaysia: Capital and Control (TN)." Harvard Business School Teaching Note 703-020, October 2002. View Details
- Abdelal, Rawi E., and Laura Alfaro. "Capital Controls." Harvard Business School Background Note 702-082, April 2002. (Revised September 2002.) View Details
- Alfaro, Laura, Debora L. Spar, Faheen Allibhoy, and Vinati Dev. "Botswana: A Diamond in the Rough." Harvard Business School Case 703-027, March 2003. (Revised November 2005.) View Details
- Alfaro, Laura. "Botswana: A Diamond in the Rough (TN)." Harvard Business School Teaching Note 703-036, April 2003. (Revised February 2008.) View Details
- Alfaro, Laura, and Esteban Clavell. "Foreign Direct Investment." Harvard Business School Background Note 703-018, October 2002. (Revised March 2009.) View Details
- Alfaro, Laura, Debora L. Spar, and Cate Reavis. "New Partnership for Africa's Development, The." Harvard Business School Case 704-006, September 2003. (Revised May 2004.) View Details
- Abdelal, Rawi E., Laura Alfaro, and Brett Laschinger. "Bombardier: Canada versus Brazil at the WTO." Harvard Business School Case 703-022, February 2003. (Revised May 2003.) View Details
- Alfaro, Laura. "Brazil: Embracing Globalization?" Harvard Business School Case 701-104, April 2001. (Revised May 2002.) View Details
- Alfaro, Laura. "Brazil: Embracing Globalization? TN." Harvard Business School Teaching Note 702-079, May 2002. View Details
- Alfaro, Laura, Yasheng Huang, and Marios S. Kalochoritis. Power to the States: "Fiscal Wars" for FDI in Brazil. Harvard Business School Case 701-079, March 2001. (Revised February 2004.) View Details
- Opinion Pieces - Written Press
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- Alfaro, Laura, Pablo Guidotti, Guillermo Perry, and Liliana Rojas-Suarez. "La amenaza proteccionista de Trump a América Latina [Trump's Protectionist Threat to Latin America]." Project Syndicate (July 10, 2018). View Details
- Alfaro, Laura. "Analysis Law 1881 [Desvestir un Santo para Vestir Otro: Ley 1881]." La Nación (Costa Rica) (July 12, 2015). View Details
- Alfaro, Laura. "Latin America: Back to the Eighties or New Challenges? [América Latina: ¿De vuelta a los ochenta o nuevos desafíos?]." La Nación (Costa Rica) (December 11, 2015). View Details
- Alfaro, Laura. "América Latina al final de la bonanza económica [Latin America at the End of the Economic Bonanza]." La Nación (Costa Rica) (April 26, 2015). View Details
- Alfaro, Laura. "China: nuevo modelo de crecimiento [China: the new growth model]." La Nación (Costa Rica) (February 8, 2014). View Details
- Alfaro, Laura. "Queremos hospitales calidad FIFA [We Want FIFA-quality Hospitals]." La Nación (Costa Rica) (July 7, 2013). View Details
- Alfaro, Laura. "Infraestructura en América Latina [Infrastructure in Latin America: A perspective from the HBS Latin America Conference]." La Nación (Costa Rica) (April 7, 2013). View Details
- Alfaro, Laura. "Informe de la comisión de notables [Report of the Committee of the Notables]." La Nación (Costa Rica) (March 3, 2013). View Details
- Alfaro, Laura. "Expectativas en EE. UU." La Nación (Costa Rica) (December 30, 2012). View Details
- Alfaro, Laura. "Elecciones en Estados Unidos." La Nación (Costa Rica) (October 14, 2012). View Details
- Alfaro, Laura. "Brasil adopta medidas para mejorar competitividad." La Nación (Costa Rica) (September 13, 2012). View Details
- Alfaro, Laura. "Perspectiva del modelo de desarrollo costarricense." La Nación (Costa Rica) (August 19, 2012). View Details
- Alfaro, Laura. "Comicios en Grecia: una fecha decisiva?" La Nación (Costa Rica) (June 10, 2012). View Details
- Alfaro, Laura. "Una posición clara ante la descentralización." La Nación (Costa Rica) (May 2, 2011). View Details
- Alfaro, Laura. "Mideplan: Rendición de cuentas 2010-2012." La Nación (Costa Rica) (April 29, 2012). View Details
- Alfaro, Laura. "Una herramienta vital." La Nación (Costa Rica) (June 3, 2011). View Details
- Alfaro, Laura. "Estrategia de abordaje de la planificación regional." Diario Extra (April 19, 2011). View Details
- Alfaro, Laura. "Abordaje de la planificación regional." La Nación (Costa Rica) (April 17, 2011). View Details
- Alfaro, Laura. "Modelo de excelencia en la gestión pública costarricense." Diario Extra (March 28, 2011). View Details
- Alfaro, Laura. "Seguridad ciudadana y paz social. Polsepaz define el actuar a largo plazo para una red de actores mayor que el gobierno." La Nación (Costa Rica) (March 14, 2011). View Details
- Alfaro, Laura. "Los desastres naturales en Costa Rica." La Nación (Costa Rica) (February 20, 2011). View Details
- Alfaro, Laura. "Una reflexión sobre los datos de la Encuesta Nacional de Hogares 2010. Evolución reciente de la pobreza en Costa Rica." Diario Extra (December 27, 2010). View Details
- Alfaro, Laura. "Plan Nacional de Desarrollo 2011-2014: María Teresa Obregón Zamora." La Nación (Costa Rica) (December 25, 2010). View Details
- Alfaro, Laura. "La labor del Mideplan." El Financiero (November 14, 2010). View Details
- Alfaro, Laura. "Voluntad política para realizar el censo 2011." La Nación (Costa Rica) (October 22, 2010). View Details
- Alfaro, Laura. "Voluntad política para realizar el censo 2011." Diario Extra (October 26, 2010). View Details
- Alfaro, Laura. "Apoyo al régimen municipal: Mideplan asume la coordinación del proceso de descentralización del régimen municipal." La Nación (Costa Rica) (July 17, 2010). View Details
- Alfaro, Laura. "Objetivos de Desarrollo del Milenio. Mezcla de buena voluntad, esfuerzo y perseverancia." La Nación (Costa Rica) (October 3, 2010). View Details
- Alfaro, Laura. "El Plan nacional de Desarrollo, herramienta al servicio de la Nación." Diario Extra (September 13, 2010). View Details
- Alfaro, Laura. "MIDEPLAN asume acciones de preparación técnica del proceso de transferencias de competencias y recursos del Poder Ejecutivo a los Gobiernos Locales." Diario Extra (July 17, 2010). View Details
- Research Summary
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Global supply chains have come under unprecedented stress as a result of US-China trade tensions, the Covid-19 pandemic, and geopolitical shocks. We document shifts in the pattern of US participation in global value chains over the last four decades, in terms of partner countries, products, and modes, with a focus on the last five years (2017-2022). The available data point to a looming "great reallocation" in supply chain activity: Direct US sourcing from China has decreased, with low-wage locations (principally: Vietnam) and nearshoring/friendshoring alternatives (notably: Mexico) gaining in import share. The production line positioning of the US’ imports has also become more upstream, which is indicative of some reshoring of production stages. We sound several cautionary notes over the policies that have set this reallocation in motion: It is unclear if these measures will reduce US dependence on supply chains linked to China, and there are moreover already signs that prices of imports from Vietnam and Mexico are on the rise.We develop an incomplete-contracts model to jointly study firm boundaries and the allocation of decision rights within them. Integration has an option value: it gives firm owners authority to delegate or centralize decision rights, depending on who can best solve problems that may arise in the course of an uncertain production process. To examine the evidence, we construct measures of vertical integration and delegation for thousands of firms in different countries and industries. In line with the model’s predictions, we find that input value and supplier uncertainty play a key role in shaping both integration and delegation choices.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 about regional variation of manufacturing firms' integration into global value chains: firms in emerging Asia are very export oriented relative to their dependence on imported intermediates; firms from Latin America and Eastern Europe depend heavily on imported intermediates compared to their export orientation; firms from high-income countries export on average as much as they import. Motivated by these facts, we build a dynamic model in which real depreciations raise the cost of importing intermediates, affect export demand, borrowing-constraints and the profitability of engaging in innovation (R&D). We decompose the effects of RER changes on average firm-level productivity growth across regions into these channels. We then structurally estimate the model and quantitatively evaluate the different mechanisms by providing counterfactual simulations of temporary RER movements. In export-oriented emerging Asia, real depreciations are on average associated with higher firm-level probabilities to engage in R&D, faster growth of firm-level productivity and cash-flow and higher export entry rates. We find negative average effects for firms in other emerging economies, which are relatively more import dependent, and no significant average effects for firms in industrialized economies. Effects on physical TFP growth, while different across regions, are non-linear and asymmetric.Over the past decade, non-Paris Club creditors, notably China, have become an important source of financing for low- and middle-income countries. In contrast with typical sovereign debt, these lending arrangements are not public, and other creditors have no information about their magnitude. We transform the traditional sovereign debt and default model to quantitatively study incomplete information arrangements and find that they greatly reduce traditional Paris Club creditors' debt sustainability. Disclosure of nontraditional debt would imply significant welfare gains for the recipient countries but would reduce its sustainability. We discuss the implications of nontraditional lending on standard assumptions of sovereign debt models.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 with information on the universe of corporate loans for 2003-2013. Borrowing methods from the matched employer-employee literature, which allow handling large data sets, we identify bank-specific shocks for each year in our sample. We then construct firm-specific exogenous credit supply shocks and estimate their direct and indirect effects on real activity combining the Spanish Input-Output structure and firm-specific measures of upstream and downstream exposure. Credit supply shocks have sizable direct and downstream propagation effects on investment and output throughout the whole period but no significant impact on employment during the expansion period. Downstream propagation effects are quantitative larger in magnitude than direct effects. The results corroborate the importance of network effects in quantifying the real effects of credit shocks and show that real effects vary during booms and busts.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 being 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.In recent decades, advances in information and communication technology and falling trade barriers have led firms to retain within their boundaries and in their domestic economies only a subset of their production stages. A key decision facing firms worldwide is the extent of control to exert over the different segments of their production processes. We describe a property-rights model of firm boundary choices along the value chain that generalizes Antràs and Chor (2013). To assess the evidence, we construct firm-level measures of the upstreamness of integrated and non-integrated inputs by combining information on the production activities of firms operating in more than 100 countries with input-output tables. In line with the model's predictions, we find that whether a firm integrates upstream or downstream suppliers depends crucially on the elasticity of demand for its final product. Moreover, a firm's propensity to integrate a given stage of the value chain is shaped by the relative contractibility of the stages located upstream versus downstream from that stage, as well as by the firm's productivity. Our results suggest that contractual frictions play an important role in shaping the integration choices of firms around the world.We characterize the agglomeration patterns of industries and plants in Europe, distinguishing Eurozone countries and the United States. Using a micro-level index, we quantify the degree of geographic concentration in industrial activities and explore how firm heterogeneity, industry attributes, and location fundamentals jointly explain the observed patterns. Our analysis shows that there is a clear hub-and-spoke structure in the geographic distribution. Larger and more productive plants, especially the superstars of each industry, are more centered than their smaller, less productive counterparts. The greater agglomeration surrounding superstars is particularly pronounced in the Eurozone but not present in the rest of Europe. Location fundamentals also play an important role and can sometimes mitigate the importance of agglomeration economies around large firms. Regions with different levels of economic development, including in education and technology, exhibit distinct agglomeration patterns. The findings suggest heterogeneity in the ability of regional policies to build superstar-centered industry clusters.In the past decade, foreign participation in local-currency bond markets in emerging countries increased dramatically. We revisit sovereign debt sustainability under the assumptions that countries can accumulate reserves and borrow internationally using their own currency. As opposed to traditional sovereign-debt models, asset-valuation effects occasioned by currency fluctuations act to absorb global shocks and render consumption smoother. Countries do not accumulate reserves to be depleted in “bad” times. Instead, issuing domestic debt while accumulating reserves acts as a hedge against external shocks. A quantitative exercise of the Brazilian economy suggests this strategy to be effective for smoothing consumption and reducing the occurrence of default.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.What is the relationship between product prices and vertical integration? While the literature has focused on how integration affects prices, this paper provides evidence that prices can affect integration. Many theories in organizational economics and industrial organization posit that integration, while costly, increases productivity. It follows from firms’ maximizing behavior that higher prices induce more integration. The reason is that at low prices, increases in revenue resulting from enhanced productivity are too small to justify the cost, whereas at high prices the revenue benefit exceeds the cost. Trade policy provides a source of exogenous price variation to assess the validity of this prediction: higher tariffs should lead to higher prices and therefore to more integration. We construct firmlevel indices of vertical integration for a large set of countries and industries and exploit cross-section and time-series variation in import tariffs to examine their impact on firm boundaries. Our empirical results provide strong support for the view that output prices are a key determinant of vertical integration.In aftermath of the global financial crisis of 2008–2009, emerging-market governments have increasingly restricted foreign capital inflows. The data show a statistically significant drop in cumulative abnormal returns for Brazilian firms following capital control announcements. Large firms and the largest exporting firms appear less negatively affected compared to externalfinance-dependent firms, and capital controls on equity have a more negative announcement effect than those on debt. Real investment falls following the controls. Overall, the results suggest that capital controls segment international financial markets, increase the cost of capital, reduce the availability of external finance, and lower firm-level investment.We examine the differential response of establishments to the recent global financial crisis with particular emphasis on the role of foreign ownership. Using a worldwide establishment panel dataset, we investigate how multinational subsidiaries around the world responded to the crisis relative to local establishments. We find that, first, multinational subsidiaries fared on average better than local counterfactuals with similar economic characteristics. Second, among multinational subsidiaries, establishments sharing stronger vertical production and financial linkages with parents exhibited greater resilience. Finally, in contrast to the crisis period, the effect of foreign ownership and linkages on establishment performance was insignificant in non-crisis years.
We construct measures of net private and public capital flows for a large cross-section of developing countries considering both creditor and debtor side of the international debt transactions. Using these measures, we demonstrate that sovereign-to-sovereign transactions account for upstream capital flows and global imbalances. Specifically, we find that i) international net private capital flows (inflows minus outflows of private capital) are positively correlated with countries’ productivity growth, ii) net sovereign debt flows (government borrowing minus reserves) are negatively correlated with growth only if net public debt is financed by another sovereign, iii) net public debt financed by private creditors is positively correlated with growth, iv) public savings are strongly positively correlated with growth, whereas correlation between private savings and growth is flat and statistically insignificant. These empirical facts contradict the conventional wisdom and constitute a challenge for the existing theories on upstream capital flows and global imbalances.
This paper examines the impact of the deregulation of compulsory industrial licensing in India on firm size dynamics and reallocation of resources within industries. Following deregulation, resource misallocation declines, and the left-hand tail of the firm size distribution thickens significantly, suggesting increased entry by small firms. However, the dominance and growth of large incumbents remains unchallenged. Quantile regressions reveal that the distributional effects of deregulation on firm size are significantly non-linear. The reallocation of market shares toward a small number of large firms and a large number of small firms is characterized as the "shrinking middle" in Indian manufacturing. Small- and medium-sized firms may continue to face constraints in their attempts to grow.The explosion of multinational activities in recent decades is rapidly transforming the global landscape of industrial production. But are the emerging clusters of multinational production the rule or the exception? What drives the offshore agglomeration of multinational firms in comparison to the agglomeration of domestic firms? Using a unique worldwide plant-level dataset that reports detailed location, ownership, and operation information for plants in over 100 countries, we construct a spatially continuous index of agglomeration and analyze the different patterns underlying the global economic geography of multinational and nonmultinational firms. We present new stylized facts that suggest that the offshore clusters of multinationals are not a simple reflection of domestic industrial clusters. Agglomeration economies including technology diffusion and capital-good market externality play a more important role in the offshore agglomeration of multinationals than the agglomeration of domestic firms. These findings remain robust when we explore the process of agglomeration.We identify a new type of vertical foreign direct investment (FDI) made up of multinational subsidiaries producing intermediate inputs, which are of similar skill intensity to the final goods produced by their parents, and which are overwhelmingly located in high skill countries. These subsidiaries make up more than half of all vertical subsidiaries and are not readily explained by the comparative advantage considerations in traditional models of vertical FDI, where firms locate their low skill production stages abroad in low skill countries to take advantage of factor cost differences. In this paper we exploit a remarkable new firm level data set which establishes the location, ownership, and activity of 650,000 multinational subsidiaries—close to a comprehensive picture of global multinational activity. A number of patterns emerge from the data. Most foreign direct investment (FDI) occurs between rich countries. The share of vertical FDI (subsidiaries which provide inputs to their parent firms) is larger than commonly thought, even within developed countries. More than half of all vertical subsidiaries are only observable at the four-digit level because the inputs they are supplying are so proximate to their parent firm’s final good that they appear identical at the two-digit level. We call these proximate subsidiaries ‘intra-industry’ vertical FDI and find that their location and activity are significantly different to the inter-industry vertical FDI visible at the two-digit level. We explain this pattern of intra-industry north-north vertical FDI in terms of the decision to outsource versus own the production of intermediate inputs. Overwhelmingly, multinationals source raw materials and inputs in early stages of production from outside the firm, but tend to own the stages of production proximate to their final production giving rise to a class of high-skill intra-industry vertical FDI.We construct a dynamic equilibrium model with contingent service and adverse selection to quantitatively study sovereign debt. In the model, benefits of defaulting are tempered by higher future interest rates. For a wide parameter, the only equilibrium is one in which the sovereign defaults in all states; additional output losses, however, sustain equilibria that resemble the data. We show that due to the adverse selection problem, some countries choose to delay default in order to reduce loss of reputation. Moreover, although equilibria with no default imply in greater welfare levels, they are not sustainable in highly indebted and volatile countries.Sovereign Debt as a Contingent Claim: A Quantitative Approach
Most models currently used to determine optimal foreign reserve holdings take the level of international debt as given. Some of the implications of this analysis, however, may not be generalized once one considers the joint decision to hold debt and reserves by a sovereign. Given the sovereigns willingness to pay incentive problems, reserve accumulation may reduce sustainable debt levels. In addition, assuming debt levels constant does not allow addressing one of the puzzles behind the current accumulation of reserves. Sovereign countries have an alternative way of reducing the negative effects of external crisis: to reduce the level of sovereign debt. To study the joint decision of holding sovereign debt and reserves, we construct a small open economy stochastic dynamic equilibrium model, which is then calibrated to a sample of emerging markets. We study different scenarios associated with interest rate shocks, sudden stops, output costs and the use of contingent reserves. A robust quantitative result that emerges is that the optimal policy is not to accumulate reserves. In fact, in most of simulated economies, the optimal level of reserves holding is zero.We examine one of the channels through which financial integration can help promote growth. In particular, we study the effects of capital account liberalization on the imports of capital goods. We pay particular attention to the effects of equity market liberalization. We find that for the period 1980-1997, after controlling for trade liberalization and other macroeconomic reforms and policies, stock market liberalization leads to a substantial increase in the share of imports of capital goods. Our results suggest that with the increased access to international capital firms noticeably increase their spending on imports of machinery and equipment.In this paper we characterize the topology of global multinational networks and examine the macro and micro patterns of multinational activity. We construct indices of network density at both pairwise industry and establishment level and measure agglomeration in a global and continuous metric space. These indices exhibit distinct advantages compared to traditional measures of agglomeration including the independence on the level of geographic aggregation. Estimating the indices using a new worldwide establishment dataset, we investigate both the significance and causes of multinational firm co-agglomeration. In contrast to the conventional emphasis of the literature on the role of input-output linkages, we assess the effect of various agglomeration economies. We find that, relative to counterfactuals, multinationals with greater capital-market externalities, knowledge spillovers and vertical linkages exhibit significant co-agglomeration. The importance of these factors differs across headquarter, subsidiary and employment networks but knowledge spillovers and capital-market externalities, two traditionally under-emphasized forces, exert consistently strong effects. Within each macro network, there is a large heterogeneity across subsidiaries. Subsidiaries with a greater size and a higher productivity attract significantly more agglomeration than their counterfactuals and become the hubs of the network.Quantifying the gains from multinational production has been a vital topic of economic research. Positive productivity gains are often attributed to knowledge spillover from multinational to domestic firms. An alternative, less stressed explanation is firm selection whereby competition from multinationals leads to market reallocation and survival of only the most productive domestic firms. We develop a model that incorporates both aspects and identify their relative importance in the gains from multinational production by exploring their distinct predictions on domestic productivity and revenue distributions. We show that knowledge spillover shifts both distributions rightward while selection and reallocation raise the left truncation of the distributions and shift revenue leftward. Using a rich firm-level panel dataset that spans 60 countries, our structural estimates suggest firm selection and market reallocation constitute an important source of productivity gains while its relative importance varies across nations. Ignoring the role of this source can lead to significant bias in understanding the nature of gains. We also perform counterfactual analysis and quantify both the aggregate and the decomposed welfare effects of multinational production.
We examine the role of different explanations for the lack of flows of capital from rich to poor countries -- the Lucas paradox -- in an empirical framework. Broadly, the theoretical explanations for this paradox include differences in fundamentals affecting the production structure versus capital market imperfections. Our empirical evidence, based on cross-country regressions, shows that for the period 1971-1998, institutional quality, which is a fundamental, is the most important causal variable explaining the Lucas paradox. Human capital and asymmetric information do play a role as determinants of capital flows but these variables cannot account for the paradox.Why Doesn't Capital Flow from Rich to Poor Countries? An Empirical Investigation
We explore the relation between international financial integration and the level of entrepreneurial activity in a country. Researchers have stressed the role of new firm activity and economic dynamism on growth. Yet, the empirical effects of international capital mobility on entrepreneurial activity have received little attention in the literature albeit the ambiguous theoretical predictions and the intense policy debate. Using a unique comprehensive data set of nearly 24 million firms in a close to 100 developed and developing countries, we find higher entrepreneurial activity in countries with fewer restrictions to international capital flows. Our results are robust to using various proxies for entrepreneurial activity such as entry, size, age, skewness of the firm-size and firm-age distribution and controlling for other variables that might affect the business environment such as the size of the market, regulation, enforcement of property rights and other institutional variables. We also use different empirical specifications in our analysis. We further explore various channels through which international financial integration can affect entrepreneurship and provide consistent evidence to support our results. In particular, we find that the presence of downstream foreign firms has a positive effect on firm activity (a foreign direct investment channel) and we find higher entrepreneurial activity in sectors more reliant on external finance (a capital/credit availability channel). Overall our study provides suggestive evidence that international financial integration has been associated with higher levels of entrepreneurial activity.Using firm-level data this paper analyzes, the transformation of India’s economic structure following the implementation of economic reforms. The focus of the study is on publicly-listed and unlisted firms from across a wide spectrum of manufacturing and services industries and ownership structures such as state-owned firms, business groups, private and foreign firms. Detailed balance sheet and ownership information permit an investigation of a range of variables such as sales, profitability, and assets. Here we analyze firm characteristics shown by industry before and after liberalization and investigate how industrial concentration, the number, and size of firms of the ownership type evolved between 1988 and 2005. We find great dynamism displayed by foreign and private firms as reflected in the growth in their numbers, assets, sales and profits. Yet, closer scrutiny reveals no dramatic transformation in the wake of liberalization. The story rather is one of an economy still dominated by the incumbents (state-owned firms) and to a lesser extent, traditional private firms (firms incorporated before 1985). Sectors dominated by state-owned and traditional private firms before 1988-1990, with assets, sales and profits representing shares higher than 50%, generally remained so in 2005. The exception to this broad pattern is the growing importance of new and large private firms in the services sector. Rates of return also have remained stable over time and show low dispersion across sectors and across ownership groups within sectors.The empirical literature finds mixed evidence on the existence of positive productivity externalities in the host country generated by foreign multinational companies. We propose a novel mechanism, which emphasizes the role of local financial markets in enabling foreign direct investment (FDI) to promote growth through backward linkages, shedding light on this empirical ambiguity. In a small open economy, final goods production combines the production processes of foreign and domestic firms, which compete for skilled labor, unskilled labor, and intermediate products. In order to operate a firm in the intermediate goods sector, entrepreneurs must first engage in R\&D to develop a new variety of intermediate good. Innovation requires capital costs, which must be financed through the domestic financial institutions. The more developed the local financial markets are, the easier it is for credit constrained entrepreneurs to start their own firms. Thus the number of varieties of intermediate goods increases, causing positive spillovers to the final goods sector. As a result the host country benefits from the backward linkages between foreign and domestic firms since the local financial markets allow these linkages to turn into FDI spillovers. Our calibration exercise confirms our analytical results. For the same proportion of foreign owned firms, countries with well developed financial markets grow twice as fast compared to those with poorly developed markets. Further the effect of an increase in FDI on growth is higher for the countries with well developed markets. The calibration exercise also shows the importance of the other local conditions such as market structure and human capital---the absorptive capacities---for the effect of FDI on economic growth.There are different arguments in favor and against nominal and indexed debt which broadly include the incentive to default through inflation versus hedging against unforeseen shocks. We model these arguments and calibrate the model to assess the quantitative importance of each. We use a dynamic equilibrium model with tax distortion, government outlays, uncertainty, and contingent debt service, which we take to mean nominal debt. In the model, the benefits of defaulting through inflation are tempered by higher future interest rates. We obtain that calibrated costs from contingent inflation more than offset the benefits for any amount of nominal debt. We further discuss sustainability of nominal debt in volatile (developing) countries.We model and calibrate the arguments in favor and against short-term and long-term debt. These arguments broadly include: maturity-term premium, tax smoothing, rolling over risk and the cost from defaulting. We use a dynamic equilibrium model with tax distortion, government outlays uncertainty, and model maturity as the fraction of debt that needs to be rolled over ever period. In the model, the benefits of defaulting are tempered by higher future interest rates. We obtain that the calibrated costs from defaulting long-term debt more than offset other costs associated with short-term debt. Therefore, short-term debt implies in higher welfare levels.Several recent papers have used plant-level data and panel econometric techniques to carefully explore the existence FDI externalities. One conclusion that emerges from this literature is that it is difficult to find evidence of positive externalities from multinationals to local firms in the same sector (horizontal externalities). In fact, many studies find evidence of negative horizontal externalities arising from multinational activity while confirming the existence of positive externalities from multinationals to local firms in upstream industries (vertical externalities). In this paper we explore the channels through which these positive and negative externalities may be materializing, focusing on the role of backward linkages. In particular, we criticize the common usage of the domestic sourcing coefficient as an indicator of a firms linkage potential and propose an alternative, theoretically derived indicator. We then use plant-level data from several Latin American countries to compare multinationals linkage potential to that of domestic firms. We find that multinationals linkage potential in Brazil, Chile and Venezuela is higher than for domestic firms. For Mexico, we cannot reject the hypothesis that foreign and local firms have similar linkage potential. Finally, we discuss the relationship between this finding and the conclusions that emerge from the recent empirical literature.In this paper, we examine the various links among foreign direct investment (FDI), financial markets, and economic growth. We explore whether countries with better financial systems can exploit FDI more efficiently. Empirical analysis, using cross-country data between 1975-1995, shows that FDI alone plays an ambiguous role in contributing to economic growth. However, countries with well-developed financial markets gain significantly from FDI. The results are robust to different measures of financial market development, the inclusion of other determinants of economic growth, and consideration of endogeneity.FDI and Economic Growth: The Role of the Local Financial Markets
In this paper we distinguish different qualities of FDI to re-examine the relationship between FDI and growth. Establishing the quality of FDI, however, is a difficult concept. Quality, that is the effect of a unit of FDI on economic growth, is a combination and interaction of many different country and project characteristics, those characteristics are hard to measure and the data quality is generally poor. Hence, we broadly differentiate quality FDI in several different ways. First, we look at the possibility that the effects of FDI differ by sector. Second, we differentiate FDI based on objective qualitative industry characteristics including the average skill intensity and reliance on external capital. Third, we use a new dataset on industry-level targeting to analyze quality FDI based on the subjective preferences expressed by the receiving countries themselves, since no one characteristic of FDI can determine quality and because the quality of FDI is the interaction of investment and country characteristics. Finally, we use a two-stage least squares methodology to control for measurement error and endogeneity to establish the quality of FDI as determined by countries themselves. Exploiting a new comprehensive industry level data set of 29 countries between 1985 and 2000, we find that the growth effects of FDI increase when we account for the quality of FDI.This paper further tests Romers (1993) extension of Kydland and Prescotts (1977) predictions on dynamic-inconsistency problems with regard to open economies. In a panel data set, I find that openness does not seem to play a role in the short run in restricting inflation, but a fixed exchange-rate regime plays a significant role. This result is robust to the use Reinhart and Rogoffs (2002) exchange rate regime classification. If the openness-inflation relationship arises from the dynamic inconsistency of discretionary monetary policy, the relationship is weaker in countries with fixed exchange-rate regimes.We construct an Overlapping-Generations model where agents vote on whether to open or close the economy to international capital flows. Political decisions are shaped by the risk over capital and labor returns. In an open economy, the capitalists (old) completely hedge their savings income. In contrast, in a closed economy, the workers (young) partially insulate wages from the productivity shocks. We find three possible equilibrium outcomes: economies that eventually remain open, those that eventually remain closed, and those that cycle between open and closed. In line with the stylized fact, cycles are more common in economies with moderate development levels.We describe the patterns of international capital flows in the period 1970-2000. We then examine the determinants of capital flows and capital flow volatility during this period. We find that institutional quality is an important determinant of capital flows. Historical determinants of institutional quality have a direct effect on today's foreign investment. Policy plays a significant role in explaining the increase in the level of capital flows and their volatility. Local financial structure measured as the share of bank credit in total is associated with high volatility of capital flows..This paper provides a political economy explanation for temporary exchange-rate-based stabilization programs by focusing on the distributional effects of real exchange-rate appreciation. I propose an economy in which agents are endowed with either tradable or nontradable goods. Under a cash-in-advance assumption, a temporary reduction in the devaluation rate induces a consumption boom accompanied by real appreciation, which hurts the owners of tradable goods. The owners of nontradables have to weigh two opposing effects: an increase in the present value of nontradable goods wealth and a negative intertemporal substitution effect. For reasonable parameter values, owners of nontradables are better off. - Awards & Honors
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Recipient of a Harvard China Fund Faculty Grant in 2018.Recipient of a 2016 Lemann Brazil Research Fund Award from Harvard University.Named Warren Alpert Professor of Business Administration, 2013.Named Research Associate at the National Bureau of Economic Research, 2013.Named a Young Global Leader 2008 by the World Economic Forum. The honor, bestowed annually, recognizes leaders in business, government, academia, and the media—below the age of 41—for their professional accomplishments, their commitment to society, and their potential to contribute to shaping the future of the world.Named Faculty Research Fellow at the National Bureau of Economic Research, 2007.Recipient of Dissertation Award, Department of Economics, University of California, Los Angeles, 1998.Recipient of Fellowship, Foundation Francisco Marroquín, 1993-1999.
- Additional Information
- Areas of Interest
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- capital markets
- economics
- foreign direct investment
- globalization
- international finance
- economic development
- government and business
- international business
- macroeconomics
- political economy
- Africa
- Asia
- Brazil
- Central America
- East Asia
- Korea
- South America
- Southeast Asia
- Southern Africa
Additional TopicsGeographies - In The News
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