International Fragmentation of Production and the Intrafirm Trade of U.S. Multinational Companies

An increasingly important feature of global economic integration is trade in intermediate inputs associated with the fragmentation of production across national borders. For some goods, production has become a multinational process in which different stages are carried out in specialized plants around the globe. Materials and components produced in one country may pass through a sequence of other countries that each add value through fabrication, assembly, or other processing before a final product is delivered to consumers.… more »