Intra-firm trade and contract completeness: Evidence from Japanese foreign-affiliated firms

Research output: Chapter in Book/Report/Conference proceedingChapter

Abstract

The issue on growth and its variations of the intra-firm trade of intermediate inputs are of great interest in international economics. Recently, many economists have stepped forward to explain this issue. However, traditional trade theory cannot explain the choice between intra-firm trade with vertical integration and international outsourcing. Thus, researchers are motivated to incorporate the concepts from industrial organization and contract theory to explain the organizational structure of firms. Using micro data at the affiliate-firm level, this chapter examines the determinants of intra-firm trade by shedding light not only on factor prices and trade costs but also on organizational structure in terms of the ownership of overseas plants and the control over intermediate inputs for further processing. Since organizational structure and intra-firm trade are jointly determined, we adopt instrumental variable (IV) regressions into our analysis and treat the choice of purchasing managers as an endogenous variable. The results suggest that the control over input decisions critically affects the intra-firm trade of intermediate inputs.

Original languageEnglish
Title of host publicationInternationalization of Japanese Firms: Evidence from Firm-level Data
PublisherSpringer Japan
Pages151-169
Number of pages19
Volume9784431545323
ISBN (Print)9784431545323, 443154531X, 9784431545316
DOIs
Publication statusPublished - 2013 Dec 1

Fingerprint

Intra-firm trade
Foreign firms
Completeness
Intermediate inputs
Organizational structure
Instrumental variables regression
Factor prices
Vertical integration
Purchasing
Trade theory
Economists
International outsourcing
Ownership
Trade costs
Endogenous variables
International economics
Contract theory
Micro data
Managers
Organization theory

Keywords

  • Incomplete contracts
  • Intra-firm trade
  • Organizational structure
  • Ownership and control

ASJC Scopus subject areas

  • Economics, Econometrics and Finance(all)
  • Business, Management and Accounting(all)

Cite this

Matsuura, T., & Ito, B. (2013). Intra-firm trade and contract completeness: Evidence from Japanese foreign-affiliated firms. In Internationalization of Japanese Firms: Evidence from Firm-level Data (Vol. 9784431545323, pp. 151-169). Springer Japan. https://doi.org/10.1007/978-4-431-54532-3_8

Intra-firm trade and contract completeness : Evidence from Japanese foreign-affiliated firms. / Matsuura, Toshiyuki; Ito, Banri.

Internationalization of Japanese Firms: Evidence from Firm-level Data. Vol. 9784431545323 Springer Japan, 2013. p. 151-169.

Research output: Chapter in Book/Report/Conference proceedingChapter

Matsuura, T & Ito, B 2013, Intra-firm trade and contract completeness: Evidence from Japanese foreign-affiliated firms. in Internationalization of Japanese Firms: Evidence from Firm-level Data. vol. 9784431545323, Springer Japan, pp. 151-169. https://doi.org/10.1007/978-4-431-54532-3_8
Matsuura T, Ito B. Intra-firm trade and contract completeness: Evidence from Japanese foreign-affiliated firms. In Internationalization of Japanese Firms: Evidence from Firm-level Data. Vol. 9784431545323. Springer Japan. 2013. p. 151-169 https://doi.org/10.1007/978-4-431-54532-3_8
Matsuura, Toshiyuki ; Ito, Banri. / Intra-firm trade and contract completeness : Evidence from Japanese foreign-affiliated firms. Internationalization of Japanese Firms: Evidence from Firm-level Data. Vol. 9784431545323 Springer Japan, 2013. pp. 151-169
@inbook{05a82c6858444faf8c43833c9e0148a4,
title = "Intra-firm trade and contract completeness: Evidence from Japanese foreign-affiliated firms",
abstract = "The issue on growth and its variations of the intra-firm trade of intermediate inputs are of great interest in international economics. Recently, many economists have stepped forward to explain this issue. However, traditional trade theory cannot explain the choice between intra-firm trade with vertical integration and international outsourcing. Thus, researchers are motivated to incorporate the concepts from industrial organization and contract theory to explain the organizational structure of firms. Using micro data at the affiliate-firm level, this chapter examines the determinants of intra-firm trade by shedding light not only on factor prices and trade costs but also on organizational structure in terms of the ownership of overseas plants and the control over intermediate inputs for further processing. Since organizational structure and intra-firm trade are jointly determined, we adopt instrumental variable (IV) regressions into our analysis and treat the choice of purchasing managers as an endogenous variable. The results suggest that the control over input decisions critically affects the intra-firm trade of intermediate inputs.",
keywords = "Incomplete contracts, Intra-firm trade, Organizational structure, Ownership and control",
author = "Toshiyuki Matsuura and Banri Ito",
year = "2013",
month = "12",
day = "1",
doi = "10.1007/978-4-431-54532-3_8",
language = "English",
isbn = "9784431545323",
volume = "9784431545323",
pages = "151--169",
booktitle = "Internationalization of Japanese Firms: Evidence from Firm-level Data",
publisher = "Springer Japan",

}

TY - CHAP

T1 - Intra-firm trade and contract completeness

T2 - Evidence from Japanese foreign-affiliated firms

AU - Matsuura, Toshiyuki

AU - Ito, Banri

PY - 2013/12/1

Y1 - 2013/12/1

N2 - The issue on growth and its variations of the intra-firm trade of intermediate inputs are of great interest in international economics. Recently, many economists have stepped forward to explain this issue. However, traditional trade theory cannot explain the choice between intra-firm trade with vertical integration and international outsourcing. Thus, researchers are motivated to incorporate the concepts from industrial organization and contract theory to explain the organizational structure of firms. Using micro data at the affiliate-firm level, this chapter examines the determinants of intra-firm trade by shedding light not only on factor prices and trade costs but also on organizational structure in terms of the ownership of overseas plants and the control over intermediate inputs for further processing. Since organizational structure and intra-firm trade are jointly determined, we adopt instrumental variable (IV) regressions into our analysis and treat the choice of purchasing managers as an endogenous variable. The results suggest that the control over input decisions critically affects the intra-firm trade of intermediate inputs.

AB - The issue on growth and its variations of the intra-firm trade of intermediate inputs are of great interest in international economics. Recently, many economists have stepped forward to explain this issue. However, traditional trade theory cannot explain the choice between intra-firm trade with vertical integration and international outsourcing. Thus, researchers are motivated to incorporate the concepts from industrial organization and contract theory to explain the organizational structure of firms. Using micro data at the affiliate-firm level, this chapter examines the determinants of intra-firm trade by shedding light not only on factor prices and trade costs but also on organizational structure in terms of the ownership of overseas plants and the control over intermediate inputs for further processing. Since organizational structure and intra-firm trade are jointly determined, we adopt instrumental variable (IV) regressions into our analysis and treat the choice of purchasing managers as an endogenous variable. The results suggest that the control over input decisions critically affects the intra-firm trade of intermediate inputs.

KW - Incomplete contracts

KW - Intra-firm trade

KW - Organizational structure

KW - Ownership and control

UR - http://www.scopus.com/inward/record.url?scp=84930895919&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=84930895919&partnerID=8YFLogxK

U2 - 10.1007/978-4-431-54532-3_8

DO - 10.1007/978-4-431-54532-3_8

M3 - Chapter

AN - SCOPUS:84930895919

SN - 9784431545323

SN - 443154531X

SN - 9784431545316

VL - 9784431545323

SP - 151

EP - 169

BT - Internationalization of Japanese Firms: Evidence from Firm-level Data

PB - Springer Japan

ER -