The Determinants of Intrafirm Trade: Evidence from French Firms

Gregory Corcos, Delphine M. Irac, Giordano Mion and Thierry Verdier
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Delphine M. Irac: Banque de France

The Review of Economics and Statistics, 2013, vol. 95, issue 3, 825-838

Abstract: How well does the theory of the firm explain the choice between intrafirm and arm's-length trade? This paper uses firm-level import data from France to look into this question. We find support for three key predictions of property rights theories of the multinational firm. Intrafirm imports are more likely in capital- and skill-intensive firms, in highly productive firms, and from countries with well-functioning judicial institutions. We bridge previous aggregate findings with our investigation by decomposing intrafirm imports into an extensive and intensive margin and uncover interesting patterns in the data that require further theoretical investigation. © 2013 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.

Keywords: intrafirm trade; outsourcing; firm heterogeneity; incomplete contracts; internationalization strategies; quality of institutions; extensive margin; intensive margin (search for similar items in EconPapers)
JEL-codes: F12 F19 F23 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (79)

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Related works:
Working Paper: The determinants of intrafirm trade: evidence from French firms (2013)
Working Paper: The Determinants of Intrafirm Trade: Evidence from French Firms (2013)
Working Paper: The Determinants of Intrafirm Trade: Evidence from French Firms (2013)
Working Paper: The determinants of intrafirm trade: Evidence from French firms (2012)
Working Paper: The Determinants of Intrafirm Trade: Evidence from French Firms (2012)
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