Replication data for: Foreign Rivals Are Coming to Town: Responding to the Threat of Foreign Multinational Entry

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Project Citation:

Bao, Cathy Ge, and Chen, Maggie Xiaoyang. Replication data for: Foreign Rivals Are Coming to Town: Responding to the Threat of Foreign Multinational Entry. Nashville, TN: American Economic Association [publisher], 2018. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2019-10-12. https://doi.org/10.3886/E113719V1

Project Description

Summary: How do domestic firms respond to the threat of foreign competition? This paper quantifies foreign competition threats by exploiting news of potential multinational investments from over 35,000 media outlets around the world. Using firm-specific measures of foreign competition threat, the analysis shows that domestic firms respond by upgrading productivity, raising innovation, and altering product composition. However, there is a U-shape relationship between initial productivity and productivity growth where the right and left tails upgrade productivity through innovation and product dropping, respectively. These responses constitute an economically important source of gains and convey new implications for the timing of economic policies.

Scope of Project

JEL Classification:
      D24 Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
      F23 Multinational Firms; International Business
      L25 Firm Performance: Size, Diversification, and Scope
      L82 Entertainment; Media
      O30 Innovation; Research and Development; Technological Change; Intellectual Property Rights: General

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Published Versions

V1 [2019-10-12]

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