Intra-Firm Trade and Product Contractibility

21 Pages Posted: 7 May 2010 Last revised: 27 Mar 2012

See all articles by Andrew B. Bernard

Andrew B. Bernard

Dartmouth College - Tuck School of Business; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)

J. Bradford Jensen

Georgetown University - McDonough School of Business; Peterson Institute for International Economics

Peter K. Schott

Yale University - School of Management; National Bureau of Economic Research (NBER); Yale University - Cowles Foundation

Stephen J. Redding

Princeton University

Multiple version iconThere are 3 versions of this paper

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

Bernard, Andrew B. and Jensen, J. Bradford and Schott, Peter K. and Redding, Stephen J., Intra-Firm Trade and Product Contractibility (May 7, 2010). Peterson Institute for International Economics Working Paper No. 10-3, Tuck School of Business Working Paper No. 2010-79, Available at SSRN: https://ssrn.com/abstract=1602026 or http://dx.doi.org/10.2139/ssrn.1602026

Andrew B. Bernard

Dartmouth College - Tuck School of Business ( email )

100 Tuck Hall
Hanover, NH 03755
United States
603-646-0302 (Phone)
603-646-9084 (Fax)

HOME PAGE: http://mba.tuck.dartmouth.edu/pages/faculty/Andrew.Bernard/

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

J. Bradford Jensen (Contact Author)

Georgetown University - McDonough School of Business ( email )

3700 O Street, NW
Washington, DC 20057
United States

Peterson Institute for International Economics ( email )

1750 Massachusetts Avenue, NW
Washington, DC 20036
United States

Peter K. Schott

Yale University - School of Management ( email )

135 Prospect Street
P.O. Box 208200
New Haven, CT 06520-8200
United States
203-436-4260 (Phone)
203-436-6974 (Fax)

HOME PAGE: http://www.som.yale.edu/faculty/pks4

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Yale University - Cowles Foundation

Box 208281
New Haven, CT 06520-8281
United States

Stephen J. Redding

Princeton University ( email )

Princeton, NJ 08544-1021
United States

HOME PAGE: http://www.princeton.edu/~reddings/

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
188
Abstract Views
1,637
Rank
213,825
PlumX Metrics