Intra-Firm Trade and Product Contractibility
21 Pages Posted: 7 May 2010 Last revised: 27 Mar 2012
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Intra-Firm Trade and Product Contractibility
Intra-Firm Trade and Product Contractibility
Intra-Firm Trade and Product Contractibility
Date Written: May 7, 2010
Abstract
This paper examines the determinants of intra-firm trade in US imports using detailed country-product data. We create a new measure of product contractibility based on the degree of intermediation in international trade for the product. We find important roles for the interaction of country and product characteristics in determining intra-firm trade shares. Intra-firm trade is high for products with low levels of contractibility sourced from countries with weak governance, for skill-intensive products from skill-scarce countries, and for capital-intensive products from capital-abundant countries.
Keywords: Related Party Trade, Imports, Contract Theory, Contractibility, Intermediation, Human Capital, Physical Capital
JEL Classification: F23, F14, L14, L22, L23, L24
Suggested Citation: Suggested Citation
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