Non-financial corporations from emerging market economies (EMEs) have increased their external borrowing significantly through the offshore issuance of debt securities. Having obtained funds abroad, the foreign affiliate of a non-financial corporation could transfer funds to its home country via...

We propose and empirically test a novel trade credit channel through which the presence of foreign-owned firms can propagate international liquidity shocks to a local country despite its tight controls over portfolio flows. A well-documented advantage of foreign-owned firms, especially large...