The U.S. Multinational Advantage during the 2008-2009 Financial Crisis: The Role of Services Trade
January 2026
Working Paper Number:
CES-26-04
Abstract
We document the augmenting role of services exports in U.S. multinationals' goods-export growth during the global financial crisis. Using newly linked data on U.S. firms' foreign sales of goods and services and a triple-difference identification strategy combined with propensity-score matching, we find that compared to multinationals that only export goods (mono-exporters), multinationals that also export services to the same destination (bi-exporters) experienced higher goods-export growth. This result is driven by sales of intellectual property rights related to industrial processes (e.g., patents, trademarks). We also find higher growth in bi-exporters' foreign affiliate services sales and domestic employment in services sectors. These results reveal a pivotal role of services exports in supporting foreign demand for U.S. goods during the crisis.
Document Tags and Keywords
Keywords
Keywords are automatically generated using KeyBERT, a powerful and innovative
keyword extraction tool that utilizes BERT embeddings to ensure high-quality and contextually relevant
keywords.
By analyzing the content of working papers, KeyBERT identifies terms and phrases that capture the essence of the
text, highlighting the most significant topics and trends. This approach not only enhances searchability but
provides connections that go beyond potentially domain-specific author-defined keywords.
:
market,
enterprise,
sale,
commerce,
import,
export,
subsidiary,
good,
shipment,
exporting,
exporter,
multinational,
foreign,
economically,
gdp,
exported,
merchandise,
exporters multinationals,
trader,
corp,
exports countries
Tags
Tags are automatically generated using a pretrained language model from spaCy, which excels at
several tasks, including entity tagging.
The model is able to label words and phrases by part-of-speech,
including "organizations." By filtering for frequent words and phrases labeled as "organizations", papers are
identified to contain references to specific institutions, datasets, and other organizations.
:
American Economic Association,
International Trade Commission,
Bureau of Economic Analysis,
Organization for Economic Cooperation and Development,
Business Services,
Environmental Protection Agency,
Federal Reserve System,
World Bank,
Department of Homeland Security,
North American Industry Classification System,
Business Register,
Census Bureau Disclosure Review Board,
United Nations,
Longitudinal Firm Trade Transactions Database,
World Trade Organization
Similar Working Papers
Similarity between working papers are determined by an unsupervised neural
network model
know as Doc2Vec.
Doc2Vec is a model that represents entire documents as fixed-length vectors, allowing for the
capture of semantic meaning in a way that relates to the context of words within the document. The model learns to
associate a unique vector with each document while simultaneously learning word vectors, enabling tasks such as
document classification, clustering, and similarity detection by preserving the order and structure of words. The
document vectors are compared using cosine similarity/distance to determine the most similar working papers.
Papers identified with 🔥 are in the top 20% of similarity.
The 10 most similar working papers to the working paper 'The U.S. Multinational Advantage during the 2008-2009 Financial Crisis: The Role of Services Trade' are listed below in order of similarity.
-
Working PaperSupply Chain Adjustments to Tariff Shocks: Evidence from Firm Trade Linkages in the 2018-2019 U.S. Trade War
August 2024
Working Paper Number:
CES-24-43
We use the 2018-2019 U.S. trade war to examine how supply chains adjustments to a tariff cost shock affect imports and exports. Using confidential firm-trade linked data, we show that the decline in imports of tariffed goods was driven by discontinuations of U.S. buyer'foreign supplier relationships, reduced formation of new relationships, and exits by U.S. firms from import markets altogether. However, tariffed products where imports were concentrated in fewer suppliers had a smaller decline in import growth. We then construct measures of export exposure to import tariffs by linking tariffs paid by importing firms to their exported products. We find that the most exposed products had lower exports in 2018-2019, with most of the impact occurring in 2019.View Full Paper PDF
-
Working PaperCTRL+EXP+DEL: the Domestic Costs of U.S. Export Controls
August 2026
Working Paper Number:
CES-26-50
National-security restrictions on exports constrain exporters' market access, but empirical evidence on their domestic costs is limited. We leverage data on export transactions that includes the product classifications used to administer U.S. export controls to document a doubling in the share of U.S. exports subject to controls between 2010 and 2024 and a skewed firm-size distribution among firms that export controlled products. We then exploit the 2014 U.S. restriction on exports to Russia as a natural experiment to examine the impact of export controls on firm-level outcomes. These controls not only reduced U.S. firms' probability of exporting targeted goods to Russia but also had indirect effects: they reduced affected firms' exports of other products and to other destinations and lowered affected firms' average payroll. Our findings imply that the domestic costs of export controls extend beyond direct restrictions.View Full Paper PDF
-
Working PaperTransfer Pricing by U.S.-Based Multinational Firms
September 2008
Working Paper Number:
CES-08-29
This paper examines how prices set by multinational firms vary across arm's-length and related party customers. Comparing prices within firms, products, destination countries, modes of transport and month, we find that the prices U.S. exporters set for their arm's-length customers are substantially larger than the prices recorded for related-parties. This price wedge is smaller for commodities than for differentiated goods, is increasing in firm size and firm export share, and is greater for goods sent to countries with lower corporate tax rates and higher tariffs. We also find that changes in exchange rates have differential effects on arm's-length and related-party prices; an appreciation of the dollar reduces the difference between the prices.View Full Paper PDF
-
Working PaperGlobal Sourcing and Multinational Activity: A Unified Approach
September 2022
Working Paper Number:
CES-22-36
Multinational firms (MNEs) accounted for 42 percent of US manufacturing employment, 87 percent of US imports, and 84 of US exports in 2007. Despite their disproportionate share of global trade, MNEs' input sourcing and final-good production decisions are often studied separately. Using newly merged data on firms' trade and FDI activity by country, we show that US MNEs are more likely to import not only from the countries in which they have affiliates, but also from other countries within their affiliates' region. We rationalize these patterns in a unified framework in which firms jointly determine the countries in which to produce final goods, and the countries from which to source inputs. The model generates a new source of scale economies that arises because a firm incurs a country specific fixed cost that allows all its assembly plants to source inputs from that country. This shared fixed cost across plants creates interdependencies between firms' assembly and sourcing locations, and leads to non-monotonic responses in third markets to bilateral trade cost changes.View Full Paper PDF
-
Working PaperFood Fight: U.S. Exporters' Adjustments to Russia's 2014 Agricultural Import Ban
December 2025
Working Paper Number:
CES-25-79
This paper examines the impact of Russia's 2014 food-import ban on U.S. firms that exported banned products to Russia. Using confidential customs transaction data, we implement triple-difference and dosage-response approaches to identify how firms adjust to the sudden loss of a market. Following the ban, treated firms experienced a 30 percentage-point decrease in the probability of exporting banned food to Russia relative to control firms. However, there is substantial heterogeneity by pre-ban reliance on the Russian market: heavily reliant firms were significantly less likely to survive once the ban was in place, and survivors experienced large reductions in revenue (19%) and total export value (49%) for each standard deviation increase in Russian market exposure. We find evidence of export redirection to neighboring countries, though it is insufficient to offset losses. Any negative impacts on survivors dissipate by five years post-ban.View Full Paper PDF
-
Working PaperTrade Within Multinational Boundaries
July 2025
Working Paper Number:
CES-25-46
We leverage newly linked data from the U.S. Census Bureau and the U.S. Bureau of Economic Analysis to study transactions within U.S. multinational enterprises (MNEs). We show that using administrative data on intrafirm trade allows us to correct for measurement error in survey data and to identify the positive relationship between input-output (IO) linkages and the probability of trade between U.S. parents and their foreign affiliates. We also document the prevalence of intrafirm trade: more than half (three-quarters) of affiliates worldwide (in North America) export to or import from their U.S. parent. Our findings provide strong empirical support for traditional theories of firm boundaries that predict trade between vertically linked units of the same firm, and underscore the importance of accounting for the trade frictions that shape MNEs' regional supply chains.View Full Paper PDF
-
Working PaperImport Competition and Firms' Internal Networks
September 2021
Working Paper Number:
CES-21-28
Using administrative data on U.S. multisector firms, we document a cross-sectoral propagation of the import competition from China ('China shock') through firms' internal networks: Employment of an establishment in a given industry is negatively affected by China shock that hits establishments in other industries within the same firm. This indirect propagation channel impacts both manufacturing and non-manufacturing establishments, and it operates primarily through the establishment exit. We explore a range of explanations for our findings, highlighting the role of within-firm trade across sectors, scope of production, and establishment size. At the sectoral aggregate level, China shock that propagates through firms' internal networks has a sizable impact on industry-level employment dynamics.View Full Paper PDF
-
Working PaperEXPORTERS, SKILL UPGRADING AND THE WAGE GAP*
November 1994
Working Paper Number:
CES-94-13
This paper examines plant level evidence on the increase in demand for non-production workers in U.S. manufacturing during the 1980's. The major finding is that increases in employment at exporting plants contribute heavily to the observed increase in relative demand for skilled labor in manufacturing during the period. Exporters account for almost all of the increase in the wage gap between high and low-skilled workers. Tests of the competing theories with plant level data show that demand changes associated with increased exports are strongly associated with the wage gap increases. Increases in plant technology are determinants of within plant skill-upgrading but not of the aggregate wage gap rise.View Full Paper PDF
-
Working PaperIndustry Linkages from Joint Production
January 2023
Working Paper Number:
CES-23-02
I develop a theory of joint production to quantify aggregate economies of scope. In US manufacturing data, increased export demand in one industry raises a firm's sales in its other industries that share knowledge inputs like R&D and software. I estimate that knowledge inputs contribute to economies of scope through their scalability and partial non-rivalry within the firm. On average a 10 percent increase in output in one industry lowers prices in other industries by 0.4 percent. Such economies of scope manifest disproportionately among knowledge proximate industries and imply large spillover impacts of recent US-China trade policy on producer prices.View Full Paper PDF
-
Working PaperEmployees in the US Nonprofit Sector
May 2026
Working Paper Number:
CES-26-33
The nonprofit sector employs roughly 10% of the American workforce, making it the third largest workforce behind the retail and manufacturing sectors. Despite this, relatively little is known about its employees. This paper is the first to use comprehensive administrative tax data, covering the near-universe of workers in the US, to quantify and explain the causes of the nonprofit pay differential. Unconditionally, we find the nonprofit earnings penalty to be 12% relative to for-profit workers. Estimating an 'AKM' worker-firm job ladder model, we show that most of the penalty is causal and not driven by selection. We also document considerable heterogeneity across industries, both in terms of earnings premia/penalties and worker selection, and show that nonprofit and for-profit earnings have been converging over time.View Full Paper PDF
