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Intrafirm trade and vertical fragmentation in U.S. multinational corporations

Listed author(s):
  • Ramondo, Natalia
  • Rappoport, Veronica
  • Ruhl, Kim J.

Using firm-level data, we document two new facts regarding intrafirm trade and the activities of the foreign affiliates of U.S. multinational corporations. First, intrafirm trade is concentrated among a small number of large affiliates within large multinational corporations; the median affiliate ships nothing to the rest of the corporation. Second, we find that the input–output coefficient linking the parent's and affiliate's industries of operation — a characteristic commonly associated with production fragmentation — is not related to a corresponding intrafirm flow of goods.

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File URL: http://www.sciencedirect.com/science/article/pii/S0022199615001257
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Article provided by Elsevier in its journal Journal of International Economics.

Volume (Year): 98 (2016)
Issue (Month): C ()
Pages: 51-59

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Handle: RePEc:eee:inecon:v:98:y:2016:i:c:p:51-59
DOI: 10.1016/j.jinteco.2015.08.002
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/505552

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  16. repec:hrv:faseco:4784029 is not listed on IDEAS
  17. Daron Acemoglu & Simon Johnson & Todd Mitton, 2009. "Determinants of Vertical Integration: Financial Development and Contracting Costs," Journal of Finance, American Finance Association, vol. 64(3), pages 1251-1290, June.
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