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Does Multinational Activity Displace Trade?

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  • Clausing, Kimberly A

Abstract

Using two-panel data sets on the operations of U.S. multinational firms abroad and the operations of foreign multinational firms in the United States, this article examines the empirical relationship between international trade and multinational activity. The evidence supports the conclusion that multinational activity and trade are complementary activities, particularly multinational activity and intrafirm trade. This empirical result is consistent with the theoretical reasons one might expect a complementary relationship between the two activities and is also robust to different approaches and specifications. Copyright 2000 by Oxford University Press.

Suggested Citation

  • Clausing, Kimberly A, 2000. "Does Multinational Activity Displace Trade?," Economic Inquiry, Western Economic Association International, vol. 38(2), pages 190-205, April.
    • Handle: RePEc:oup:ecinqu:v:38:y:2000:i:2:p:190-205
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