Intrafirm trade, input–output linkage, and contractual frictions: evidence from Japanese affiliate-level data

Toshiyuki Matsuura (), Banri Ito and Eiichi Tomiura
Additional contact information
Toshiyuki Matsuura: Keio University

Review of World Economics (Weltwirtschaftliches Archiv), 2023, vol. 159, issue 1, No 4, 133-152

Abstract: Abstract This paper revisits how vertical linkages between overseas affiliates and their parents are related to intrafirm trade by shedding light on variations in contractibility across sectors in the case of Japanese multinational enterprises based on affiliate-level data. We confirm that intrafirm trade is observed only in a limited fraction of affiliates. To include a large number of affiliates with zero intrafirm trade into our regressions, we estimate our model by Poisson Pseudo Maximum Likelihood. We find that Japanese multinational affiliates tend to export relatively more to their parents in vertically linked sectors especially if they trade goods with low contractibility. This relationship is evident for affiliates located in developing countries. This result indicates that input–output linkage is a significant determinant of intrafirm trade when the trade is affected by contractual frictions. We also confirm the robustness of the results regardless of the definition of contractibility indices by previous studies.

Keywords: Intrafirm trade; Affiliate-level data; Input–output linkage; Contractual frictions (search for similar items in EconPapers)
JEL-codes: F14 F23 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s10290-022-00465-2 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
Working Paper: Intra-firm Trade, Input-output Linkage, and Contractual Frictions: Evidence from Japanese Affiliate-level Data (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:weltar:v:159:y:2023:i:1:d:10.1007_s10290-022-00465-2

Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/10290/PS2

DOI: 10.1007/s10290-022-00465-2

Access Statistics for this article

Review of World Economics (Weltwirtschaftliches Archiv) is currently edited by Paul Bergin, Holger Görg, Cédric Tille and Gerald Willmann

More articles in Review of World Economics (Weltwirtschaftliches Archiv) from Springer, Institut für Weltwirtschaft (Kiel Institute for the World Economy) Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().