We study how internal capital markets of multinational corporations transmit shocks across countries. We identify an exogenous shock to the credit supply of multinational parents located in Germany. Using detailed data on financial linkages between parents and affiliates, we show that multinationals adjusted internal capital flows (internal loans and equity investments) away from international affiliates and toward the parent after the shock to the parent. Sales of affiliates fell sharply and recovered after three years. Affiliates with larger preexisting internal capital market linkages to the parent were more strongly affected. A back-of-the-envelope calculation based on our estimates implies that a global banking crisis outside the US could reduce aggregate sales in the US by 1 percent, solely because multinationals transmit the crisis to the US through their internal networks.