Stickiness, synchronization, and passthrough in intrafirm trade prices

About 40 percent of all U.S. international trades occurs between related parties, or intrafirm, such as trades between a parent and subsidiary of the same multinational corporation. This paper uses a transaction-level dataset that distinguishes armʹs length from intrafirm trades to demonstrate that for differentiated products, intrafirm prices are characterized by (1) less stickiness, (2) less synchronization, and (3) greater exchange rate passthrough.