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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.