Productivity and the sourcing modes of multinational firms: evidence from French firm-level data

Defever, Fabrice and Toubal, Farid (2007) Productivity and the sourcing modes of multinational firms: evidence from French firm-level data. CEPDP (842). London School of Economics and Political Science. Centre for Economic Performance, London, UK. ISBN 9780853282174

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Abstract

We investigate the role of a firm’s total factor productivity in its decision to import from their affiliates rather than from independent input suppliers. We propose a slightly modified version of the Antràs and Helpman (2004) model. We assume higher fixed costs under outsourcing and a firm-specific production function. We use detailed French firm-level data that provides a geographical breakdown of French firms’ import at product level and their sourcing modes in 1999. We find strong empirical support for the theoretical predictions of the model. In particular, high-productivity firms that have a production process intensive in suppliers’ inputs source their inputs through independent foreign suppliers.

Item Type:	Monograph (Discussion Paper)
Official URL:	http://cep.lse.ac.uk
Additional Information:	© 2007 the authors
Divisions:	Centre for Economic Performance
Subjects:	H Social Sciences > HF Commerce H Social Sciences > HD Industries. Land use. Labor
JEL classification:	F - International Economics > F1 - Trade > F14 - Country and Industry Studies of Trade L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior > L22 - Firm Organization and Market Structure: Markets vs. Hierarchies; Vertical Integration; Conglomerates; Subsidiaries L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior > L23 - Organization of Production F - International Economics > F2 - International Factor Movements and International Business > F23 - Multinational Firms; International Business
Date Deposited:	18 Jul 2008 13:18
Last Modified:	13 Sep 2024 20:02
URI:	http://eprints.lse.ac.uk/id/eprint/19655

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