Thus, the MNE creates (or purchases) entities that supply it, thereby increasing reliability, maximizing efficiency and perhaps internalizing the value added (and profitability) that lies in the supply chain. Such arrangements are very clear in the manufacturing sector of the NAFTA countries.
For the United States, some 40 per cent of manufactured exports to Canada are intra-firm, and about 50 per cent of imports from Canada are also intra-firm. Similarly, around 40 per cent of US manufactured exports to Mexico are intra-firm, but a much higher proportion of US imports from Mexico—70 per cent—are intra-firm.