Intrafirm carry-along trade

Masahiro Endoh, Uraku Yoshimoto, Naoto Jinji and Keiko Ito
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Masahiro Endoh: Faculty of Business and Commerce, Keio University, Japan
Uraku Yoshimoto: Faculty of International Social Sciences, Yokohama National University, Japan
Naoto Jinji: Graduate School of Economics, Kyoto University, Japan
Keiko Ito: Graduate School of Social Sciences, Chiba University, Japan

Discussion papers from Policy Research Institute, Ministry of Finance Japan

Abstract: Carry-along trade (CAT) is the phenomenon in which manufacturing firms export prod-ucts that they have not produced themselves. This study examines the sizes and charac-teristics of CAT in both intrafirm and interfirm trade, using customs and production data from Japanese manufacturing firms from the 2014–2020 period. Depending on how CAT is defined, it may account for between one-third and two-thirds of total exports by Japanese manufacturing firms, underlining the importance of trade intermediation by producers. The ratio of CAT is notably higher in intrafirm trade than in interfirm trade. The distribution of Japanese trade flows indicates that the sizes of CAT components are influenced not only by demand-scope complementarities but also by country-specific economic factors. The high ratio of CAT in intrafirm trade can be attributed to the larger exports of both sourced and produced products by Japanese multinational firms, due to the elimination of bargaining inefficiency between sellers and buyers.

Keywords: Trade intermediation by producers; Carry-along trade; Intrafirm trade (search for similar items in EconPapers)
JEL-codes: F12 F13 F14 L11 (search for similar items in EconPapers)
Pages: 47 pages
Date: 2025-10
New Economics Papers: this item is included in nep-iaf
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https://www.mof.go.jp/pri/research/discussion_paper/ron384.pdf First version, 2016 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:mof:wpaper:ron384

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