Marcus Biermann

We study how multinational firms transmit shocks across countries through their internal capital markets. We identify a lending cut by a single German bank, which reduced the credit supply of multinational parents located in Germany. Using detailed data on internal capital markets, we show that multinationals adjusted internal capital flows toward affected parents and away from international affiliates. Affiliate sales fell sharply and recovered after three years. The results indicate that preexisting internal capital market positions can be used to predict the degree of cross-country shock transmission and that idiosyncratic shocks from “granular” banks in one country affect growth internationally.

What effect did trade have on the size distribution of firms during the first wave of globalization? Three historical datasets from the German Empire between 1875 and 1907 were collected and harmonized to answer this question. This paper uses industry census and bilateral railway trade data from the same industry and region along with tariff data from the same industry. The evidence shows that increases in aggregate trade caused the share of firms to shift from smaller to larger firms. Exogenous decreases in tariffs caused an increase in the share of the largest firms. The regional distributive effects of trade on inequality between firms that are discussed in the contemporaneous literature were already present during the first wave globalization.

This paper investigates how management practices as intangible transfers are associated with the performance of multinational business groups. Differences in the management level across source countries are predictive for multinationals’ entry patterns for a given destination country. This study uses acquisitions as a means to transplant management practices from parents to affiliates abroad. It finds that better-managed parents decrease affiliates’ employment and increase affiliates’ productivity post-acquisition. Better-managed parents are also more likely to install or retain a manager from the home country post-acquisition.

Financing Service Trade (with Peter Eppinger and Karol Paludkiewicz)