The determinants of intrafirm trade: evidence from French firms

Corcos, Gregory, Irac, Delphine M., Mion, Giordano and Verdier, Thierry (2013) The determinants of intrafirm trade: evidence from French firms. Review of Economics and Statistics, 95 (3). pp. 825-838. ISSN 0034-6535

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Abstract

How well does the theory of the firm explain the choice between intrafirm and arms' length trade? This paper uses firm-level import data from France to look into this question. We find support for three key predictions of property-rights theories of the multinational firm. Intrafirm imports are more likely: (i) in capital- and skill-intensive firms; (ii) in highly productive firms; (iii) from countries with well-functioning judicial institutions. We further bridge previous aggregate findings with our investigation by decomposing intrafirm imports into an extensive and intensive margin. Doing so we uncover interesting patterns in the data that require further theoretical investigation.

Item Type:	Article
Official URL:	http://www.mitpressjournals.org/loi/rest
Additional Information:	© 2012 The President and Fellows of Harvard College and the Massachusetts Institute of Technology
Divisions:	Geography & Environment Spatial Economics Research Centre Centre for Economic Performance
Subjects:	H Social Sciences > HC Economic History and Conditions H Social Sciences > HF Commerce
JEL classification:	F - International Economics > F1 - Trade > F12 - Models of Trade with Imperfect Competition and Scale Economies F - International Economics > F1 - Trade > F19 - Other F - International Economics > F2 - International Factor Movements and International Business > F23 - Multinational Firms; International Business
Date Deposited:	20 Mar 2012 11:56
Last Modified:	12 Dec 2024 00:18
URI:	http://eprints.lse.ac.uk/id/eprint/42706

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