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N° 2006-18 |
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| November 2006 |
| Vertical Production Networks: Evidence from France |
Michel Fouquin
Laurence Nayman
Laurent Wagner |
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| This paper investigates the determinants of intra-firm trade of multinational firms located in
France, using data on French companies. Results on the vertical pattern of production
networks differ according to the affiliates’ location. Lower wage and transportation costs in
the developing countries increase, as expected, the vertical segmentation of production. In
the developed countries, lower trade and unit wage costs, and hence, a strong and positive
labour productivity matter a lot in explaining French MNCs’ preferences. Among the other
variables of interest, partnership and market potential have been given special attention.
The results substantiate a mix of vertical and horizontal FDI, mainly when we separate out
capital intensive from labour intensive intermediate products. |
Abstract |
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| Multinational firms; intra-firm trade; intermediate products; vertical
production networks; horizontal FDI |
Keywords |
| F23, F1, L1 |
JEL classification |
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