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.

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11 September 2015     Paper Number CEPDP1371

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