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The effect of intra‐firm linkages on firm productivity

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  • Jaehan Cho
  • Bo‐Young Choi

Abstract

In this study, we investigate the relationship between intra‐firm linkages and firm productivity using a unique dataset from Korean multinational foreign affiliates. In an empirical analysis, we find that while intra‐firm imports are not statistically associated with productivity on an economy‐wide scale, a positive relationship exists among affiliates in industries with high levels of research and development (R&D) intensity. Our findings show that productivity gains from intra‐firm trade are larger for affiliates in high R&D intensity industries, thus providing evidence that intra‐firm trade is an important channel for knowledge transfer related to R&D for foreign affiliates of multinational corporations.

Suggested Citation

  • Jaehan Cho & Bo‐Young Choi, 2023. "The effect of intra‐firm linkages on firm productivity," Review of International Economics, Wiley Blackwell, vol. 31(3), pages 886-903, August.
    • Handle: RePEc:bla:reviec:v:31:y:2023:i:3:p:886-903
    DOI: 10.1111/roie.12647
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