CEP LSE RSS Contact Us YouTube Facebook Twitter


CEP Discussion Paper
Intrafirm Trade and Vertical Fragmentation in U.S. Multinational Corporations
Natalia Ramondo, Veronica Rappoport and Kim J. Ruhl September 2015
Paper No' CEPDP1371:
Full Paper (pdf)

JEL Classification: F12; F14; L11; L25

Tags: intrafirm trade; multinational corporations; international value chains

Using firm-level data, we document two new facts regarding intrafirm trade and the activities of the foreign affiliates of U.S. multinational corporations. First, intrafirm trade is concentrated among a small number of large affiliates within large multinational corporations; the median affiliate ships nothing to the rest of the corporation. Second, we find that the input-output coefficient linking the parent’s and affiliate’s industries of operation—a characteristic commonly associated with production fragmentation— is not related to a corresponding intrafirm low of goods.