1 / 14

Issues and challenges for measuring intra-firm trade

Issues and challenges for measuring intra-firm trade. Rainer Lanz and Sébastien Miroudot OECD Trade and Agriculture. Working Party on International Trade in Goods and Trade in Services Statistics 6 October 2010. Trade Committee reports on trade and activities of MNEs.

matty
Download Presentation

Issues and challenges for measuring intra-firm trade

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Issues and challenges for measuring intra-firm trade Rainer Lanz and Sébastien Miroudot OECD Trade and Agriculture Working Party on International Trade in Goods and Trade in Services Statistics 6 October 2010

  2. Trade Committee reportson trade and activities of MNEs • Vertical trade, trade costs and FDI [TAD/TC/WP(2008)23/FINAL] • Trade in intermediate goods and services [TAD/TC/WP(2009)1/FINAL] • Intra-firm trade: a work in progress [TAD/TC/WP(2010)27] • Trade in tasks: a scoping paper [TAD/TC/WP(2010)]

  3. Data used to analyse intra-firm trade • Activities of Multinational Enterprises (AMNE) Statistics • OECD Activities of Foreign Affiliates (AFA) Database – 7 countries • Firm level data • ORBIS Dataset (Bureau Van Dijk) – 43 countries • Goods Trade Statistics from Customs Authorities • Related party database from the US Census Bureau • Services Trade Statistics from Balance of Payments • US cross-border trade • Do other countries collectintra-firm tradedata in theirgoodsorservicesstatistics?

  4. AMNE statistics vs. US goodstradestatistics • Ownership thresholds • AMNE statistics: 50% • US goods trade statistics: 10% for exports and 6% for imports • Identification of the parent and affiliate firm • Inward AMNE: Trade of domestic affiliates (with foreign parents) • Outward AMNE: Trade of domestic parents (with foreign affiliates) • US goods trade statistics do not identify whether the US firm or the foreign firm is the parent • Industry versus product classification • Coverage: survey versus entire population

  5. Coverage of intra-firm trade according to inward AMNE statistics in the OECD AFA database • Very few countries report data on intra-firm trade • Partner and industry coverage is limited • Trade in services is not covered

  6. Share of intra-firm and affiliate exports in total exportsfor 7 OECD economies Notes: Data are for the year 2007 for the US, Japan, Italy and Poland; 2006 for Finland; 2002 for Sweden and the Netherlands; 1994 for Canada. Data for Poland refer to the manufacturing sector only. Source: OECD AFA Database, Statistics Finland.

  7. Total US goods trade and share of intra-firm trade(Bill. USD, 2002-2009) Source: US Census Bureau, Related Party Database

  8. Share of intra-firm exports in private services exports for the US Source: US Bureau of Economic Analysis

  9. Estimating intra-firm trade using firm level data from the ORBIS dataset? Methodologyfollows Alfaro and Charlton (2009) Idea: Intra-firm tradeoccurs in thecase of vertical FDI, i.e. theforeignaffiliateproduces an inputfortheparent • Identifyforeignaffiliatesandtheirparents in ORBIS • Parent company = global ultimateowner (>50% of equityalongtheownershipchain) • Categoriseparent-affiliatelinkagesas horizontal, verticalorcomplex FDI • Compare 6-digit NAICS industrycodes of parentandaffiliate • Useinput-linkagesfromdetailed US input-outputtabletodetermineverticalrelationship • Usesales of verticalaffiliatesasestimateforintra-firm tradebetweentheaffiliateandtheparent

  10. Motivation for FDI (and expected intra-firm trade)

  11. Evidence from firm-level data (ORBIS) ‘Rough’ estimates

  12. Comparison with US BEA data

  13. Intra-firm trade: why is it relevant? • Protectionism in the context of intra-firm trade: “Beggar Thy Neighbour is Beggar Thyself” • Impact on the political economy of trade policy: Optimal tariff lower when there is trade with domestically-owned affiliates • New issue in trade policy making: the buyer-supplier relationship • Impact on growth: additional productivity gains with the fragmentation of production and vertical specialisation • Impact on labour markets: relocation of production and shift in value-added • Impact on tax policy: transfer pricing • Macro-economic impact: role of MNEs in the transmission of macro-economic shocks

  14. Toconclude: a questionfordiscussion • Analysing intra-firm trade helps to understand operations of MNEs and is of great importance to policymakers • Only few data are available • What are the prospects for more data on intra-firm trade and where could these data come from? • AMNE statistics • Goods trade statistics (customs) • Balance of payments • Micro-data

More Related