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How Wide is the Firm Border?

Enghin Atalay (), Ali Hortacsu, Chad Syverson and Mary Li
Additional contact information
Ali Hortacsu: University of Chicago
Mary Li: Compass Lexecon

No 124, 2018 Meeting Papers from Society for Economic Dynamics

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 multi- sector trade model to quantify the economy-wide implications of transacting across vs. within firm boundaries.

Date: 2018
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Related works:
Working Paper: How Wide Is the Firm Border? (2019) Downloads
Working Paper: How Wide Is the Firm Border? (2017) Downloads
Working Paper: How Wide Is the Firm Border? (2017) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:red:sed018:124

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