DP7530 The Determinants of Intra-Firm Trade
|Author(s):||Gregory Corcos, Delphine Irac, Giordano Mion, Thierry Verdier|
|Publication Date:||November 2009|
|Keyword(s):||extensive margin, firm heterogeneity, incomplete contracts, intensive margin, internationalization strategies, intra-firm trade, outsourcing, quality of institutions|
|JEL(s):||F12, F19, F23|
|Programme Areas:||International Trade and Regional Economics|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=7530|
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.