In our paper, Surviving the Global Financial Crisis: Foreign Ownership and Establishment Performance, forthcoming in the AEJ: Economic Policy, we examine the differential response of establishments to the recent global financial crisis with particular emphasis on the role of foreign ownership. In 2007-2008, the world economy entered the deepest financial crisis since World War II. Countries around the globe witnessed major declines in output, employment, and trade. GDP in industrial countries fell by 4.5 percent while average GDP growth in emerging economies dropped from 8.8 percent in 2007 to 0.4 percent. The unemployment rate rose to 9 percent across OECD economies, and reached double digits in a mix of industrial and developing nations. World trade volume plummeted by over 40 percent in the second half of 2008, collapsing at a rate that outpaced the fall of total output.

The severity of what has been labeled as the Global Financial Crisis led many economists to explore its macro patterns and causes. Rose and Spiegel (2010), for example, investigate the potential causes for the differential extent of the crisis across countries. Using a large country-level dataset, they do not find international trade and financial linkages and other major economic indicators to be clearly associated with incidences of the crisis. Eaton et al. (2009), Levchenko, Lewis and Tesar (2010), and Chor and Manova (2011), among others, examine the potential causes of the great trade collapse, a phenomenon that received particular attention, and find, respectively, manufacturing demand, vertical specialization, and credit conditions to play important roles.

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