Cross-border Vertical Integration and Intra-firm Trade: New Evidence from Korean and Japanese Firm-level Data

Hyunbae Chun, Jung Hur, YoungGak Kim () and Hyeog Ug Kwon

Asian Economic Papers, 2017, vol. 16, issue 2, 126-139

Abstract: This paper establishes two facts about cross-border vertical integration and intra-firm trade of firms in Korean and Japanese manufacturing industries. First, the intra-firm trade between a parent firm and its affiliates is highly concentrated in a small number of large multinational corporations. Second, the input–output coefficient between the parent firm's industry and the affiliate's industry is weakly related to the presence and magnitude of intra-firm trade between the parent firm and its affiliates. Furthermore, these two characteristics are also found in domestic vertically integrated firms. In particular, the second point identifies a need for further research on the motivation of cross-border vertical integration between two manufacturers, the final good producers at home and the input suppliers abroad.

JEL-codes: F33 F36 F50 F65 G00 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (7)

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