Gregory Corcos () (Norwegian School of Economics and Business Administration) Delphine M. Irac () (Bank of France) Giordano Mion () (Université Catholique de Louvain) Thierry Verdier () (Paris School of Economics and CEPR)
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This paper analyzes the determinants of the intra-firm vs arms’length sourcing mode of imported inputs. We build a unique French dataset of 1,141,393 import transactions at the firm, country and product levels in the year 1999 that allow us to distinguish the different sourcing modes. We study the firms-, country- and product- determinants of intra-firm trade. We confirm a number of theory-based predictions building on the residuals property rights approach and provide some empirical facts that can be used to further refine this as well as alternative theories. In particular, we highlight the fact that firms’ heterogeneity needs to be evaluated across different dimensions. Furthermore, we point out that complex goods are more likely to be produced within the firm boundaries suggesting that those material and immaterial attributes that characterized a product play a key role in globalized sourcing strategies.
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Paper provided by Centro Studi Luca d\'Agliano, University of Milano in its series Development Working Papers with number
267.
Find related papers by JEL classification: F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies F19 - International Economics - - Trade - - - Other
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