@TechReport{DMSV2023,
  author={Doerr, Sebastian and Marin, Dalia and Suverato, Davide and Verdier, Thierry},
  title={{Capital Allocation Within Firms and International Trade}},
  year=2023,
  month={},
  institution={},
  type={ Working paper},
  url={},
  number={},
  abstract={This paper introduces an internal capital market into a two-factor model of multi-segment firms that features managers' empire building and informational frictions within the organization. Our novel theory shows that international trade imposes discipline on managers and improves capital allocation across divisions, thereby lowering the conglomerate discount. The theory can explain why exporters exhibit a lower conglomerate discount than non-exporters (a new fact we establish). We exploit the China shock as an exogenous shock to competition to confirm the model's predictions with data on US companies.},
  keywords={},
  doi={},
}