Gains from Intra-Firm Trade and Multinational Production

Pamela Bombarda and Stefania Marcassa

No 2014-14, THEMA Working Papers from THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise

Abstract: This paper quantifies the welfare gains from intra-firm trade. We propose a model where firms have access to competing market strategies: export and multinational production. Due to technological appropriability issues, foreign affiliates import an intermediate input from the home headquarters. The presence of export and multinational production alters the standard results obtained for welfare in heterogeneous form models, through a double truncation of the productivity distribution. The model is then calibrated to analyze counterfactual scenarios. We and that welfare gains from intra-form trade range from 0.3 to 7 percent depending on country characteristics.

Keywords: MNFs; multinational production; intra-form trade; wel-fare (search for similar items in EconPapers)
JEL-codes: F12 F23 (search for similar items in EconPapers)
Date: 2014
New Economics Papers: this item is included in nep-ger and nep-int
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Persistent link: https://EconPapers.repec.org/RePEc:ema:worpap:2014-14

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