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Gains from Intra-Firm Trade and Multinational Production

Author

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  • Pamela Bombarda

    (Université de Cergy-Pontoise, THEMA)

  • Stefania Marcassa

    (Université de Cergy-Pontoise, THEMA)

Abstract

This paper quantifies the welfare gains from intra-firm trade. We propose a model where firms have access to competing market strategies: export and multinational production. Due to technological appropriability issues, foreign affiliates import an intermediate input from the home headquarters. The presence of export and multinational production alters the standard results obtained for welfare in heterogeneous form models, through a double truncation of the productivity distribution. The model is then calibrated to analyze counterfactual scenarios. We and that welfare gains from intra-form trade range from 0.3 to 7 percent depending on country characteristics.

Suggested Citation

  • Pamela Bombarda & Stefania Marcassa, 2014. "Gains from Intra-Firm Trade and Multinational Production," THEMA Working Papers 2014-14, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
    • Handle: RePEc:ema:worpap:2014-14
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    References listed on IDEAS

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    More about this item

    Keywords

    MNFs; multinational production; intra-form trade; wel-fare;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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