Working Paper

Intra-Firm Trade and Employment in US Manufacturing

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This paper studies the impact of trade within US-headquartered multinational companies
(MNCs) on labour demand for all employees, as well as, for those of high and low skill in US
manufacturing for the period 1995 – 2005. We find strong evidence on the positive and
negative effect of intra-firm exports and imports respectively, on aggregate employment. The
former effect is stronger than the latter. Moreover, we find that demand for low-skilled labour
is negatively associated with intra-firm imports, while unaffected by intra-firm exports. In
contrast, high-skilled labour demand is positively linked to intra-firm exports but unaffected
by intra-firm imports. The last two findings put together, suggest that low-skill intensive
stages of the value-added chain are mostly transferred to the US affiliates abroad, while highskill
intensive ones are mostly kept within the US parents.


Sotiris Blanas


Publication Date
JEL Classification
F16, F23, J21, J23