The Determinants of Intra-Firm Trade
Norwegian School of Economics (NHH) - Department of Economics
Banque de France
Catholic University of Louvain (UCL) - Center for Operations Research and Econometrics (CORE)
Paris School of Economics (PSE); Delta - Ecole Normale Superieure (ENS); Centre for Economic Policy Research (CEPR)
CEPR Discussion Paper No. DP7530
How successful is the theory of the firm in explaining intra-firm trade? To answer this question we exploit a unique dataset of 1,141,393 French import transactions, spanning across firm, countries and products in 1999, and reporting whether a transaction is intra-firm. Overall, we find support for the main predictions of the partial equilibrium property-rights approach and further deliver facts that can be useful for further theoretical development. We document substantial within-industry heterogeneity while providing evidence of the importance of the firm dimension of sourcing choices as well as of the key distinction between the extensive and intensive margins.
Number of Pages in PDF File: 47
Keywords: extensive margin, firm heterogeneity, incomplete contracts, intensive margin, internationalization strategies, intra-firm trade, outsourcing, quality of institutions
JEL Classification: F12, F19, F23working papers series
Date posted: November 17, 2009
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