Intra-firm Trade and Product Contractibility (Long Version)
This paper examines the determinants of intra-firm trade in U.S. imports using detailed country-product data. We create a new measure of product contractibility based on the degree of intermediation in international trade for the product. We find important roles for the interaction of country and product characteristics in determining intra-firm trade shares. Intra-firm trade is high for products with low levels of contractability sourced from countries with weak governance, for skill-intensive products from skill-scarce countries, and for capital-intensive products from capital-abundant countries.
We thank Evan Gill, Justin Pierce and Jose Daniel Reyes for excellent research assistance, and the National Science Foundation for research support. Bernard thanks the European University Institute and Redding thanks the Centre for Economic Performance for research support. We thank Pol Antràs, Keith Head, Nathan Nunn, Emanuel Ornelas and conference seminar participants at the NBER and Paris for helpful comments. Empirical analysis was conducted at Census Research Data Centers. Any opinions, findings, conclusions or recommendations expressed in this material are those of the authors and not necessarily those of the NSF, the NBER or the U.S. Census Bureau. Results have been screened to insure no confidential data are revealed. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
"Intra-Firm Trade and Product Contractibility" American Economic Review Papers and Proceedings, Vol. 100, No. 2, May 2010 with J. Bradford Jensen, Stephen J. Redding and Peter K. Schott, (pp. 444-48)