How Wide Is the Firm Border?

Enghin Atalay, Ali Hortacsu, Mary Jialin Li and Chad Syverson

No 23777, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We examine the within- and across-firm shipment decisions of tens of thousands of goods-producing and distributing establishments. This allows us to quantify the normally unobservable forces that determine firm boundaries; which transactions are mediated by ownership control, as opposed to contracts or markets. We find firm boundaries to be an economically significant barrier to trade: having an additional vertically integrated establishment in a given destination zip code has the same effect on shipment volumes as a 40 percent reduction in distance. We then calibrate a multisector trade model to quantify the economy-wide implications of transacting across vs. within firm boundaries.

JEL-codes: D2 F14 L2 (search for similar items in EconPapers)
Date: 2017-09
New Economics Papers: this item is included in nep-cta
Note: IO ITI PR
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Citations: View citations in EconPapers (1)

Published as Enghin Atalay & Ali Hortaçsu & Mary Jialin Li & Chad Syverson, 2019. "How Wide Is the Firm Border?*," The Quarterly Journal of Economics, vol 134(4), pages 1845-1882.

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Related works:
Journal Article: How Wide Is the Firm Border? (2019)
Working Paper: How Wide Is the Firm Border? (2019)
Working Paper: How Wide is the Firm Border? (2018)
Working Paper: How Wide Is the Firm Border? (2017)
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