Intra-firm trade and product contractibility (Long Version)

This paper examines the determinants of intra-firm trade in U.S. imports using detailed countryproductdata. We create a new measure of product contractibility based on the degree ofintermediation in international trade for the product. We find important roles for the interaction ofcountry and product characteristics in determining intra-firm trade shares. Intra-firm trade is high forproducts with low levels of contractability sourced from countries with weak governance, for skillintensiveproducts from skill-scarce countries, and for capital-intensive products from capitalabundantcountries.