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Adaptation and the Boundary of Multinational Firms

Author

Listed:
  • Arnaud Costinot

    (MIT and NBER)

  • Lindsay Oldenski

    (Georgetown University)

  • James Rauch

    (UCSD and NBER)

Abstract

This paper offers the first empirical analysis of the impact of adaptation on the boundary of multinational firms. To do so, we develop a ranking of sectors in terms of "“routineness"” by merging two sets of data: ratings of occupations by their intensities in solving problems from the U.S. Department of Labor's Occupational Information Network and U.S. employment shares of occupations by sectors from the Bureau of Labor Statistics Occupational Employment Statistics. Using U.S. Census trade data, we demonstrate that the share of intrafirm trade tends to be higher in less routine sectors. © 2011 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.

Suggested Citation

  • Arnaud Costinot & Lindsay Oldenski & James Rauch, 2011. "Adaptation and the Boundary of Multinational Firms," The Review of Economics and Statistics, MIT Press, vol. 93(1), pages 298-308, February.
    • Handle: RePEc:tpr:restat:v:93:y:2011:i:1:p:298-308
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    More about this item

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation

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