The authors examine how U.S. multinational corporations (MNCs) and their Canadian affiliates responded to the substantial bilateral tariff reductions that occurred over the 1983-92 period. Using confidential firm-level data from the Bureau of Economic Analysis, they focus on the MNCs' allocation...

Using confidential firm-level panel data from the Bureau of Economic Analysis, we examine how the bilateral trade flows of U.S. multinational corporations (MNCs) and their Canadian affiliates responded to U.S.-Canadian tariff reductions from 1983 to 1992. We find that Canadian affiliate sales to...

Using confidential firm-level data from the Bureau of Economic Analysis (BEA) on activities of U.S. multinational corporations (MNCs) and their Canadian affiliates, we study the dramatic growth of intra-firm and arm's-length U.S.-Canada trade over the 1984-95 period. We find that decisions to...

Intra-firm trade in intermediates between U.S. multinational parents (MNCs) and their Canadian manufacturing affiliates increased dramatically in the 1984-1995 period (i.e., it roughly doubled). Tariff and transport cost declines were far too small to explain this phenomenon. But we show that...