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The Determinants of Intrafirm Trade: Evidence from French Firms

Author

Listed:
  • Grégory Corcos

    (Norwegian School of Economics and Business Administration - Norwegian School of Economics and Business Administration)

  • Delphine Irac

    (Banque de france - Banque de France)

  • Giordano Mion

    (LSE - London School of Economics and Political Science, CEPR - Center for Economic Policy Research - CEPR)

  • Thierry Verdier

    (CEPR - Center for Economic Policy Research - CEPR, PSE - Paris-Jourdan Sciences Economiques - CNRS - Centre National de la Recherche Scientifique - ENPC - École des Ponts ParisTech - EHESS - École des hautes études en sciences sociales - INRA - Institut National de la Recherche Agronomique - ENS Paris - École normale supérieure - Paris, PSE - Paris School of Economics)

Abstract

How well does the theory of the firm explain the choice between intrafirm and arm's-length trade? This paper uses firm-level import data from France to look into this question. We find support for three key predictions of property rights theories of the multinational firm. Intrafirm imports are more likely in capital- and skill-intensive firms, in highly productive firms, and from countries with well-functioning judicial institutions. We bridge previous aggregate findings with our investigation by decomposing intrafirm imports into an extensive and intensive margin and uncover interesting patterns in the data that require further theoretical investigation.

Suggested Citation

  • Grégory Corcos & Delphine Irac & Giordano Mion & Thierry Verdier, 2013. "The Determinants of Intrafirm Trade: Evidence from French Firms," PSE - Labex "OSE-Ouvrir la Science Economique" halshs-00879809, HAL.
    • Handle: RePEc:hal:pseose:halshs-00879809
    Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00879809
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    References listed on IDEAS

    as
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    Keywords

    Intrafirm Trade;

    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; Fragmentation
    • F19 - International Economics - - Trade - - - Other

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