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Vertical Production Networks: Evidence from France

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  • Wagner, Laurent
  • Nayman, Laurence
  • Fouquin, Michel

Abstract

This paper investigates the determinants of intra-firm trade of multinational firms located in France, using data on French companies. Results on the vertical pattern of production networks differ according to the affiliates? location. Lower wage and transportation costs in the developing countries increase, as expected, the vertical segmentation of production. In the developed countries, lower trade and unit wage costs, and hence, a strong and positive labour productivity matter a lot in explaining French MNCs? preferences. Among the other variables of interest, partnership and market potential have been given special attention. The results substantiate a mix of vertical and horizontal FDI, mainly when we separate out capital intensive from labour intensive intermediate products.

Suggested Citation

  • Wagner, Laurent & Nayman, Laurence & Fouquin, Michel, 2007. "Vertical Production Networks: Evidence from France," Economics Discussion Papers 2007-18, Kiel Institute for the World Economy (IfW).
  • Handle: RePEc:zbw:ifwedp:5565
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    Cited by:

    1. Wissner, Matthias, 2011. "ICT, growth and productivity in the German energy sector - On the way to a smart grid?," Utilities Policy, Elsevier, vol. 19(1), pages 14-19, January.
    2. Jérôme Sgard, 2006. "On Legal Origins and Brankruptcy Laws: the European Experience (1808-1914)," Sciences Po publications 2006-26, Sciences Po.
    3. repec:spo:wpecon:info:hdl:2441/8221 is not listed on IDEAS
    4. Jérôme Sgard, 2006. "On Legal Origins and Brankruptcy Laws: the European Experience (1808-1914)," Working Papers hal-01065660, HAL.
    5. Véronique Salins & Agnès Bénassy-Quéré, 2006. "Institutions and Bilateral Asset Holdings," Working Papers 2006-19, CEPII research center.

    More about this item

    Keywords

    Multinational Firms; Intra-firm Trade; Intermediate Products; Vertical Production Networks; Horizontal FDI;

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • F1 - International Economics - - Trade
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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