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Title: |
Incomplete Contracts and Vertically Integrated Multinational Enterprises |
| Author: |
Tang, Linghui |
| Author
Affiliation: |
Drexel U |
| Source: |
International Economic Journal, Spring 2002, v. 16, no. 1, pp. 127-138 |
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Publication Date: |
Spring 2002 |
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Abstract: |
This paper conducts an empirical analysis
of intra-firm trade for vertically integrated multinational enterprises
(VMNEs). Within the context of incomplete contracts, the study attempts
to explain cross-industry variations in the relative importance of
intra-firm trade. Using data for U.S. based multinationals from 1989 to
1996, it is found that the shares of U.S. intra-firm exports and imports
are positively related to the non-contractible activities of U.S. parent
firms while they are negatively related to the non-contractible
activities of foreign affiliates. |
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