Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/338358 
Year of Publication: 
2026
Series/Report no.: 
CESifo Working Paper No. 12394
Publisher: 
Munich Society for the Promotion of Economic Research - CESifo GmbH, Munich
Abstract: 
Traditional theories of firm boundaries predict trade between vertically related units of the same firm. Using novel data that combine a comprehensive mapping of U.S. multinationals’ production networks with their customs filings, we uncover a strong positive relationship between input-output linkages and trade between parents and their affiliates. We also find that intrafirm trade is prevalent, particularly between geographically proximate units: three-quarters of affiliates in North America trade with their U.S. parent. These results overturn prior findings based on survey data on intrafirm trade. Administrative intrafirm records enable correcting measurement errors in survey data, reconciling traditional theories with empirical evidence.
Subjects: 
multinational enterprises
intrafirm trade
input-output linkages
JEL: 
F14
F23
D23
L20
Document Type: 
Working Paper
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