Publications

Corporate Social Responsibility along the Global Value Chain — with Philipp Herkenhoff, Sebastian Krautheim and Finn Ole Semrau. Journal of Development Economics, March 2024. Link

Abstract: Locating substantial parts of the production process in developing and emerging economies, many firms face an increasing demand by stakeholders for Corporate Social Responsibility (CSR) along their value chains. Contractual incompleteness between firms and their suppliers at different stages of production can exacerbate the ability to meet these demands. We analyze a model of sequential production with incomplete contracts where CSR by independent suppliers differentiates the final product in the eyes of caring consumers. Progressing down the value chain, our model predicts an increasing CSR profile from upstream suppliers with low CSR to downstream suppliers with higher CSR. We confirm this prediction using Indian firm-level data — computing a firm’s value chain position by combining its product-level sales information with the World Input-Output Database. We find that more downstream firms report higher CSR expenditures as measured by a combination of staff welfare spending and social community spending.

Foreign Direct Investment & Petty Corruption in Sub-Saharan Africa: An Empirical Analysis at the Local Level — with Julian Donaubauer and Peter Kannen. Journal of Development Studies, 2021. Link

Abstract: Inspired by a recent and ongoing debate about whether foreign direct investment (FDI) represents a blessing for or an impediment to economic, social, and political development in FDI host countries this paper addresses two issues: Does the presence of foreign investors impact the occurrence of petty corruption? If so, what are the main underlying mechanisms? Geocoding an original firm-level dataset and combining it with georeferenced household survey data, this is a first attempt to analyze whether the presence of foreign investors is associated with changes in local corruption around foreign-owned production facilities in 19 Sub-Saharan African countries. Applying an estimation strategy that explores the spatial and temporal variation in the data, we find strong and consistent evidence that the presence of foreign firms increases bribery among people living nearby. When examining two potential channels, we find no clear support that FDI-induced economic activity leads to more corruption. In contrast, the results provide evidence that FDI affects corruption via norm transmission.

Abstract: To accelerate the pace of green transformation, a country relies heavily on the environmental performance of its firms. In this paper, we investigate whether firms with foreign ownership are more likely to adopt green management practices, helping these firms to monitor and reduce their environmental impact. Using firm-level data for 31 countries from Eastern Europe, Central Asia and North Africa, we show that foreign ownership increases the likelihood of implementing green management practices. Overall, we find the relationship to be more pronounced in the manufacturing sector than in the service sector. However, this relationship is not automatic — holding only for 1) firms in more developed countries, 2) countries with superior environmental performance, and 3) countries receiving the bulk of their foreign direct investments (FDI) from relatively developed countries. Firms based in less developed countries do not necessarily derive environmental benefits from foreign ownership.

Corporate Governance and Firm Performance – Evidence from the Corporate Governance Reform in India — single authored. Draft coming soon.