Global Sourcing and Multinational Activity: A Unified Approach

Citation:

Antras, Pol, Evgenii Fadeev, Teresa Fort, and Felix Tintelnot. 2022. “Global Sourcing and Multinational Activity: A Unified Approach”.
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Abstract:

We develop a multi-country model in which multinational firms choose not only the location of their various assembly plants worldwide, but also the countries from which these plants import inputs. Our framework identifies a natural complementarity between these global sourcing and global assembly decisions. This complementarity delivers novel implications for the role of geography and trade policy in shaping the firms' global production strategies. By merging data on the full range of all US firms' domestic activities and imports from the US Census Bureau with comprehensive information on US multinationals' foreign affiliate activity and on foreign-owned firms' US plants, we provide novel evidence on these interdependencies.  Multinationals account for the vast majority of US imports and exports, their export platform sales dwarf US exports, and they are much more likely to import not only from the countries in which they have affiliates, but also from other countries within their affiliate's region.

Last updated on 09/11/2022