Date of Award

6-2014

Document Type

Open Access

Degree Name

Bachelor of Arts

Department

Economics

First Advisor

Fuat Sener

Language

English

Keywords

international trade, markets, economics, recession, property rights

Abstract

The level of US intra-firm imports from Emerging Markets, EM, (i.e., imports of MNEs from their foreign affiliates) has increased from 149 billion USD in 2002 to 347 billion USD in 2012. A similar magnitude is observed for US arm’s length imports (i.e., imports of MNEs from third parties in foreign countries). This thesis estimates the responsiveness of US intra-firm and arm’s length imports to Intellectual Property Rights (IPR) protection indicators, “Doing Business” indicators, and to the Global Recession. I use two panel data sets, one covering 332 industries (3-digit NAICS) and 43 emerging countries from 2002 to 2012, the other covering 10 industries (2-digit NAICS) and 190 countries over the same time period. My regressions control for fixed country, industry, and time effects. I find that the levels of both intra-firm trade and arm’s length trade increase substantially in response to stronger IPRs. I also find that the share of intra-firm imports in total imports increases due to stronger IPRs, a result which suggests that firms increase their intra-firm activities by more than their arm’s length activities. During the Great Recession, the share of intra-firm imports to Emerging Markets increases by 1.1 %. This implies that the decline in intra-firm imports is smaller than the decline in either arm’s length trade or total intra-firm trade, a result which shows the relative resilience of intra-firm trade to fluctuations in global output. Finally, “Doing Business” indicators, including “Enforcing Contracts”, do not have significant effects on the share of intra-firm imports.

Download

Share

COinS