IDEAS home Printed from https://ideas.repec.org/a/bla/reviec/v31y2023i3p886-903.html

The effect of intra‐firm linkages on firm productivity

Author

Listed:
  • Jaehan Cho
  • Bo‐Young Choi

Abstract

In this study, we investigate the relationship between intra‐firm linkages and firm productivity using a unique dataset from Korean multinational foreign affiliates. In an empirical analysis, we find that while intra‐firm imports are not statistically associated with productivity on an economy‐wide scale, a positive relationship exists among affiliates in industries with high levels of research and development (R&D) intensity. Our findings show that productivity gains from intra‐firm trade are larger for affiliates in high R&D intensity industries, thus providing evidence that intra‐firm trade is an important channel for knowledge transfer related to R&D for foreign affiliates of multinational corporations.

Suggested Citation

  • Jaehan Cho & Bo‐Young Choi, 2023. "The effect of intra‐firm linkages on firm productivity," Review of International Economics, Wiley Blackwell, vol. 31(3), pages 886-903, August.
    • Handle: RePEc:bla:reviec:v:31:y:2023:i:3:p:886-903
    DOI: 10.1111/roie.12647
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/roie.12647
    Download Restriction: no
    File URL: https://libkey.io/10.1111/roie.12647?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Kilian Huber, 2018. "Disentangling the Effects of a Banking Crisis: Evidence from German Firms and Counties," American Economic Review, American Economic Association, vol. 108(3), pages 868-898, March.
    2. Enghin Atalay & Ali Horta?su & Chad Syverson, 2014. "Vertical Integration and Input Flows," American Economic Review, American Economic Association, vol. 104(4), pages 1120-1148, April.
    3. Madsen, Jakob B., 2007. "Technology spillover through trade and TFP convergence: 135 years of evidence for the OECD countries," Journal of International Economics, Elsevier, vol. 72(2), pages 464-480, July.
    4. Coe, David T. & Helpman, Elhanan, 1995. "International R&D spillovers," European Economic Review, Elsevier, vol. 39(5), pages 859-887, May.
    5. Braga, Helson & Willmore, Larry, 1991. "Technological Imports and Technological Effort: An Analysis of Their Determinants in Brazilian Firms," Journal of Industrial Economics, Wiley Blackwell, vol. 39(4), pages 421-432, June.
    6. Daniel A. Ackerberg & Kevin Caves & Garth Frazer, 2015. "Identification Properties of Recent Production Function Estimators," Econometrica, Econometric Society, vol. 83, pages 2411-2451, November.
    7. Wolfgang Keller & Stephen Ross Yeaple, 2013. "The Gravity of Knowledge," American Economic Review, American Economic Association, vol. 103(4), pages 1414-1444, June.
    8. Debaere, Peter & Lee, Hongshik & Lee, Joonhyung, 2013. "Language, ethnicity and intrafirm trade," Journal of Development Economics, Elsevier, vol. 103(C), pages 244-253.
    9. Grossman, Gene M. & Helpman, Elhanan, 1991. "Trade, knowledge spillovers, and growth," European Economic Review, Elsevier, vol. 35(2-3), pages 517-526, April.
    10. Cho, Jaehan, 2018. "Knowledge transfer to foreign affiliates of multinationals through expatriation," Journal of International Economics, Elsevier, vol. 113(C), pages 106-117.
    11. Helpman, Elhanan, 1984. "A Simple Theory of International Trade with Multinational Corporations," Journal of Political Economy, University of Chicago Press, vol. 92(3), pages 451-471, June.
    12. Albert G. Z. Hu & Gary H. Jefferson & Qian Jinchang, 2005. "R&D and Technology Transfer: Firm-Level Evidence from Chinese Industry," The Review of Economics and Statistics, MIT Press, vol. 87(4), pages 780-786, November.
    13. Keller, Wolfgang, 2002. "Trade and the Transmission of Technology," Journal of Economic Growth, Springer, vol. 7(1), pages 5-24, March.
    14. Petia Topalova & Amit Khandelwal, 2011. "Trade Liberalization and Firm Productivity: The Case of India," The Review of Economics and Statistics, MIT Press, vol. 93(3), pages 995-1009, August.
    15. Carmen Astorne‐Figari & Joonhyung Lee, 2019. "An Empirical Investigation on the Transfer of Expatriates Within MNCs from a Knowledge Perspective," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 81(4), pages 780-796, August.
    16. Ramondo, Natalia, 2014. "A quantitative approach to multinational production," Journal of International Economics, Elsevier, vol. 93(1), pages 108-122.
    17. Mary Amiti & Jozef Konings, 2007. "Trade Liberalization, Intermediate Inputs, and Productivity: Evidence from Indonesia," American Economic Review, American Economic Association, vol. 97(5), pages 1611-1638, December.
    18. Nishioka, Shuichiro & Ripoll, Marla, 2012. "Productivity, trade and the R&D content of intermediate inputs," European Economic Review, Elsevier, vol. 56(8), pages 1573-1592.
    19. McGrattan, Ellen R. & Prescott, Edward C., 2009. "Openness, technology capital, and development," Journal of Economic Theory, Elsevier, vol. 144(6), pages 2454-2476, November.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Sharma, Chandan, 2018. "Exporting, access of foreign technology, and firms’ performance: Searching the link in Indian manufacturing," The Quarterly Review of Economics and Finance, Elsevier, vol. 68(C), pages 46-62.
    2. Cho, Hyunjung & Bak, Gahee & Kim, Junyun & Lee, Hongshik, 2025. "The knowledge transfer patterns of multinational firms: The evidence from Korean firm-level analysis," Japan and the World Economy, Elsevier, vol. 75(C).
    3. Muscillo, Alessio & Pin, Paolo & Razzolini, Tiziano & Serti, Francesco, 2018. "Does "Network Closure" Beef up Import Premium?," IZA Discussion Papers 12036, IZA Network @ LISER.
    4. Chiara Criscuolo & Jonathan Timmis, 2017. "The Relationship Between Global Value Chains and Productivity," International Productivity Monitor, Centre for the Study of Living Standards, vol. 32, pages 61-83, Spring.
    5. Harald Badinger & Peter Egger, 2016. "Productivity Spillovers Across Countries and Industries: New Evidence From OECD Countries," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 78(4), pages 501-521, August.
    6. Bahar, Dany, 2020. "The hardships of long distance relationships: time zone proximity and the location of MNC's knowledge-intensive activities," Journal of International Economics, Elsevier, vol. 125(C).
    7. Sami SAAFI & Fouzi SBOUI, 2011. "LES OPPORTUNITES DES INVESTISSEMENTS DIRECTS ETRANGERS LES OPPORTUNITES DES INVESTISSEMENTS DIRECTS ETRANGERS, DIFFUSION TECHNOLOGIQUE ET DEMANDE DE LA MAIN-D’OEUVRE PAR QUALIFICATION DES INDUSTRIES TUNISIENNES. Y a-t-il un biais technologique en fav," Working Papers 240, Laboratoire de Recherche sur l'Industrie et l'Innovation. ULCO / Research Unit on Industry and Innovation.
    8. Bruno Merlevede & Angelos Theodorakopoulos, 2018. "Productivity Effects of Internationalisation Through the Domestic Supply Chain: Evidence from Europe," Working Papers of VIVES - Research Centre for Regional Economics 627689, KU Leuven, Faculty of Economics and Business (FEB), VIVES - Research Centre for Regional Economics.
    9. Simon Bösenberg & Peter H. Egger & Valeria Merlo & Georg Wamser, 2018. "Measuring The Interdependence Of Multinational Firms' Foreign Investments," Economic Inquiry, Western Economic Association International, vol. 56(2), pages 1064-1088, April.
    10. Curuk, M., 2012. "Trade, Technology Diffusion and Misallocation : Trade Partner Matters (Replaces CentER DP 2011-125)," Discussion Paper 2012-046, Tilburg University, Center for Economic Research.
    11. Astorne, Carmen & Lee, Joonhyung, 2025. "Tacit knowledge in management roles: Evidence from the use of expatriates in South Korean MNCs," Journal of Economic Behavior & Organization, Elsevier, vol. 237(C).
    12. Leblebicioğlu, Asli & Weinberger, Ariel, 2021. "Openness and factor shares: Is globalization always bad for labor?," Journal of International Economics, Elsevier, vol. 128(C).
    13. Shimaa Elkomy & Hilary Ingham & Robert Read, 2020. "The Impact of Foreign Technology & Embodied R&D On Productivity in Internationally-Oriented & High-Technology Industries in Egypt, 2006-2009," Working Papers 293574925, Lancaster University Management School, Economics Department.
    14. Marco Grazzi & Nanditha Mathew & Daniele Moschella, 2021. "Making one’s own way: jumping ahead in the capability space and exporting among Indian firms," Journal of Evolutionary Economics, Springer, vol. 31(3), pages 931-957, July.
    15. Ayerst, Stephen & Ibrahim, Faisal & MacKenzie, Gaelan & Rachapalli, Swapnika, 2023. "Trade and diffusion of embodied technology: an empirical analysis," Journal of Monetary Economics, Elsevier, vol. 137(C), pages 128-145.
    16. Chu, Angus C. & Fan, Haichao & Shen, Guobing & Zhang, Xun, 2018. "Effects of international trade and intellectual property rights on innovation in China," Journal of Macroeconomics, Elsevier, vol. 57(C), pages 110-121.
    17. Curuk, M., 2012. "Trade, Technology Diffusion and Misallocation : Trade Partner Matters (Replaces CentER DP 2011-125)," Other publications TiSEM 5b6ed4ee-03f2-44bc-9fe6-e, Tilburg University, School of Economics and Management.
    18. Nune Hovhannisyan, 2019. "Technology Gap and International Knowledge Transfer: New Evidence from the Operations of Multinational Corporations," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 45(4), pages 612-638, October.
    19. Luke Emeka Okafor & Mita Bhattacharya & Harry Bloch, 2017. "Imported Intermediates, Absorptive Capacity and Productivity: Evidence from Ghanaian Manufacturing Firms," The World Economy, Wiley Blackwell, vol. 40(2), pages 369-392, February.
    20. Callado-Muñoz, Francisco J. & Hromcová, Jana & Utrero-González, Natalia, 2023. "Can buying weapons from your friends make you better off? Evidence from NATO," Economic Modelling, Elsevier, vol. 118(C).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:reviec:v:31:y:2023:i:3:p:886-903. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0965-7576 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.