International Activities of Firms http://lists.repec.org/mailman/listinfo/nep-iaf International Activities of Firms 2026-03-02 Trade within multinational boundaries https://d.repec.org/n?u=RePEc:cep:cepdps:dp2153&r=&r=iaf Traditional theories of firm boundaries predict trade between vertically related units of the same firm. Using novel data that combine a comprehensive mapping of U.S. multinationals' production networks with their customs filings, we uncover a strong positive relationship between input-output linkages and trade between parents and their affiliates. We also find that intrafirm trade is prevalent, particularly between geographically proximate units: three-quarters of affiliates in North America trade with their U.S. parent. These results overturn prior findings based on survey data on intrafirm trade. Administrative intrafirm records enable correcting measurement errors in survey data, reconciling traditional theories with empirical evidence. Laura Alfaro Paola Conconi Fariha Kamal Zachary Kroff multinational enterprises, intrafirm trade, input-output linkages 2026-02-18 Elsewhere in North America: How U.S. Tariffs on China Boosted Mexico's Manufacturing Employment and Output https://d.repec.org/n?u=RePEc:ces:ceswps:_12425&r=&r=iaf Using administrative longitudinal firm- and plant-level data from Mexico that links manufacturing firms to their customs records and covers the period 2014–2023, I examine whether US tariffs targeting China have contributed to a manufacturing revival in the southern part of North America. Leveraging the abrupt shift in US trade policy as a natural experiment, and constructing firm-level trade policy exposure measures based on firms’ pre-shock trade portfolios at the product level, I show that higher US tariffs on China significantly increased manufacturing output and employment. Adjustment occurs along both intensive and extensive margins, through expansion of existing plants and the establishment of new manufacturing plants by incumbent firms. Foreign multinationals and their domestic affiliates operating under Mexico’s export platform, IMMEX, drive these gains in manufacturing output and jobs, with U.S.-headquartered firms making a particularly notable contribution. The employment response is concentrated among production workers and technicians, particularly in technology-intensive industries embedded in North American supply-chains. These findings provide firm-level evidence that heightened import protection in the United States has stimulated manufacturing activity elsewhere in North America — namely, in Mexico. Hale Utar trade war, global value chains, multinational firms, manufacturing, employment, nearshoring 2026 Learning by AI: Market Intelligence and Exporting https://d.repec.org/n?u=RePEc:ces:ceswps:_12456&r=&r=iaf Early adoption of artificial intelligence (AI) reshaped how firms responded to market dynamics by enhancing data collection and analysis. Linking China's universe of customs shipments to millions of online job ads, we tracked AI hiring in sales, marketing, and analytics to build a firm-level proxy for non-production AI and map its exposure across products within firms. To structure our analysis, we introduce a model in which firms confront asymmetric information about heterogeneous consumer preferences and show that AI mitigates these frictions by sharpening firms' ability to learn demand patterns across markets. The model predicts — and the data confirm — that AI-intensive firms fine-tune their product mix and prices with greater precision: they are more likely to export, expand their product lines, and adjust market choices. Crucially, this refinement appears as narrower price dispersion but wider quantity dispersion across destinations — effects strongest for differentiated goods, larger firms, and sales to high-income economies. Together, the evidence shows that AI eases demand-side information frictions, allowing firms to optimize their global reach strategies. Alexis Antoniades Chuan He Zheming Liang Mingzhi Jimmy Xu artificial intelligence, export behavior, product differentiation 2026 Hidden Profits, Lost Jobs? Tax Havens and Employment Decisions https://d.repec.org/n?u=RePEc:ces:ceswps:_12464&r=&r=iaf Despite their advantages, multinational enterprises (MNEs) receive significant criticism, particularly with regard to offshoring jobs and shifting profits abroad to avoid taxation. Using administrative data for the universe of Norwegian and French firms and workers, we link these two issues by documenting a negative relation between MNE investment in a tax haven and employment in the high-tax country. In particular, exploiting the 2006 European Court of Justice (ECJ) decision on the Cadbury-Schweppes case which upheld the use of EU tax havens, we are able to establish a causal link in which tax haven use lowers domestic employment by 6%. Heterogeneity analyses reveal that the effects are mainly concentrated among high-skilled workers. We further link the employment changes to the substance requirements mandated by the ECJ's ruling and the secrecy inherent to tax havens. Ronald B. Davies Margarita Lopez-Forero Benjamin Michallet Johannes Scheuerer tax havens, multinational firms, employment, mass layoffs, economic substance 2026