The determinants of intrafirm trade : in search for export-import magnification effects

This paper studies the determinants of Austrian bilateral intrafirm trade in a panel of industry-level intrafirm goods trade flows. Economic size, unit labor costs and the magnification effects originating from multiple border crossing of sequentically finished products are found to be the most important determinants of trade within multinational firms. Especially, our evidence lends support to multiple border crossing of sequentially finished products, an argument that has recently been put forward in the outsourcing literature.