The Determinants of Intra-Firm Trade
47 Pages Posted: 17 Nov 2009
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The Determinants of Intra-Firm Trade
Date Written: November 2009
Abstract
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.
Keywords: extensive margin, firm heterogeneity, incomplete contracts, intensive margin, internationalization strategies, intra-firm trade, outsourcing, quality of institutions
JEL Classification: F12, F19, F23
Suggested Citation: Suggested Citation
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