In this paper, we propose the technological complexity of a product and the level of Intellectual Property Rights (IPRs) protection to be the co-determinants of the mode through which multinational firms purchase their goods. We study the choice between intra-firm trade and outsourcing given...

Firms cluster their economic activities to exploit technological and informational spillovers from other firms. Spillovers through the entry of multinational firms can be particularly beneficial to domestic firms because of their technological superiority. Yet, the importance of foreign firm's...

This paper investigates the importance of firm heterogeneity for our understanding of the aggregate volume of cross-country multinational sales. Recent theoretical literature points out a sorting out firms with respect to their internationalization strategy according to their productivity. Using...

We derive a gravity equation from two general equilibrium models with multinational firms: a symmetric firm model where foreign affiliates rely on specific intermediate goods and a heterogenous firms model with country-specific fixed costs. Although the reduced form gravity equation is the same,...