Intra- and inter-firm US trade
Bivariate Tobit gravity regressions using 2000-2007 US trade data show that US-based firms take advantage of positive forces (e.g., economic freedom) operating in foreign markets more through affiliates than third parties. Likewise, transactions with affiliates are deterred a lot more by negative forces (e.g., distance). Additionally, trade flows are higher (lower) with non-OECD (OECD) countries that are more politically free. Decompositions of the Tobit effects and the predicted-to-actual trade ratios indicate a two-pronged strategy for policymakers: develop targeted policies to specific hurdles to intra-firm trade and work aggressively on increasing market access for US exports.
Year of publication: |
2010
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---|---|
Authors: | Co, Catherine Yap |
Published in: |
International Review of Economics & Finance. - Elsevier, ISSN 1059-0560. - Vol. 19.2010, 2, p. 260-277
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Publisher: |
Elsevier |
Keywords: | Intra-firm trade Arm' s-length trade Multinational firms Gravity equation Institutions |
Saved in:
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