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

Author

Listed:
  • Ramondo, Natalia
  • Rappoport, Veronica
  • Ruhl, Kim J.

Abstract

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 low of goods.

Suggested Citation

  • Ramondo, Natalia & Rappoport, Veronica & Ruhl, Kim J., 2015. "Intrafirm trade and vertical fragmentation in U.S.multinational corporations," LSE Research Online Documents on Economics 63831, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:63831
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    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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