Firms, Contracts, and Trade Structure
Open accessAbstract
Roughly one-third of world trade is intrafirm trade.This paper starts by unveiling two systematic patterns in the volume of intrafirm trade.In a panel of industries, the share of intrafirm imports in total U.S. imports is significantly higher, the higher the capital intensity of the exporting industry.In a cross-section of countries, the share of intrafirm imports in total U.S. imports is significantly higher, the higher the capital-labor ratio of the exporting country.I then show that these patterns can be rationalized in a theoretical framework that combines a Grossman-Hart-Moore view of the firm with a Helpman-Krugman view of international trade.In particular, I develop an incompletecontracting, property-rights model of the boundaries of the firm, which I then incorporate into a standard trade model with imperfect competition and product differentiation.The model pins down the boundaries of multinational firms as well as the international location of production, and it is shown to predict the patterns of intrafirm trade identified above.Econometric evidence reveals that the model is consistent with other qualitative and quantitative features of the data.
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- Authors
- Antras, P.
- Venue
- The Quarterly Journal of Economics
- Publisher
- Oxford University Press (OUP)
- Published
- 2003-11-01
- Volume
- 118
- Issue
- 4
- Pages
- 1375-1418
- ISSN
- 0033-5533 (ISSN-L)
- 1531-4650
- OpenAlex
- W2134499434
- Cited by
- 1,194
- References
- 0
- Citations by year
- 2026: 28 · 2025: 54 · 2024: 41 · 2023: 31 · 2022: 28 · 2021: 54 · 2020: 37 · 2019: 48 · 2018: 31 · 2017: 50 · 2016: 40 · 2015: 59 · 2014: 62 · 2013: 75 · 2012: 75
- FWCI
- 78.54
- Type
- journal article
- Language
- en
- Open access
- bronze
- doi.org
- Locations
- The Quarterly Journal of Economics (publishedVersion)
- National Bureau of Economic Research (publishedVersion)
- RePEc: Research Papers in Economics (submittedVersion)
- Digital Access to Scholarship at Harvard (DASH) (Harvard University) (submittedVersion, cc-by)
- SSRN Electronic Journal (submittedVersion)
- DSpace@MIT (Massachusetts Institute of Technology) (submittedVersion, cc-by-nc)
- Funders
- Harvard University
- Division of Chemistry
- Topics
- Social Sciences › Economics, Econometrics and Finance › General Economics, Econometrics and Finance › Global trade and economics
- Social Sciences › Business, Management and Accounting › Strategy and Management › Global trade, sustainability, and social impact
- Social Sciences › Business, Management and Accounting › Strategy and Management › International Business and FDI
- Keywords
- intra-firm trade, multinational corporations, incomplete contracts, property rights, firm boundaries, capital intensity, capital-labor ratio, imperfect competition, product differentiation, trade structure
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