Trade within Multinational Boundaries

Laura Alfaro, Paola Conconi, Fariha Kamal and Zachary Kroff

No 33887, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Traditional theories of firm boundaries predict trade between vertically related units of the same firm. Using novel data that combine a comprehensive mapping of U.S. multinationals’ production networks with their customs filings, we uncover a strong positive relationship between input-output linkages and trade between parents and their affiliates. We also find that intrafirm trade is prevalent, particularly between geographically proximate units: three-quarters of affiliates in North America trade with their U.S. parent. These results overturn prior findings based on survey data on intrafirm trade. Administrative intrafirm records enable correcting measurement errors in survey data, reconciling traditional theories with empirical evidence.

JEL-codes: D23 F14 F23 F4 L20 (search for similar items in EconPapers)
Date: 2025-06
New Economics Papers: this item is included in nep-int, nep-mac and nep-opm
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Working Paper: Trade Within Multinational Boundaries (2025)
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