Working Paper: NBER ID: w21472
Authors: Natalia Ramondo; Veronica Rappoport; Kim J. Ruhl
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 flow of goods.
Keywords: No keywords provided
JEL Codes: F0
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| affiliate size (L14) | likelihood of engaging in intrafirm trade (F12) |
| affiliate size (L14) | share of total sales shipped to parent (L14) |
| input-output coefficient (C67) | intrafirm flow of goods (L14) |