Technology, endowments, and the factor content of bilateral trade
Research output: Journal Publications and Reviews › RGC 21 - Publication in refereed journal › peer-review
Author(s)
Detail(s)
Original language | English |
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Pages (from-to) | 389-409 |
Journal / Publication | Journal of International Economics |
Volume | 71 |
Issue number | 2 |
Online published | 20 Oct 2006 |
Publication status | Published - Apr 2007 |
Externally published | Yes |
Link(s)
Abstract
We derive testable restrictions relating the factor content of bilateral trade to bilateral differences in technology and endowments. This departs from the Heckscher-Ohlin-Vanek theorem which compares the factor content of net trade with factor abundance. We test the theoretical restrictions using a unique dataset that covers 41 developed and developing countries with disparate endowments and technology. We find evidence supporting the predictions. In addition: (1) The factor content predictions perform best for country pairs with larger endowment differences, and (2) for trade between capital-abundant countries, Ricardian international technology differences matter more than Heckscher-Ohlin factor endowment differences. © 2006 Elsevier B.V. All rights reserved.
Research Area(s)
- Factor content of bilateral trade, Heckscher-Ohlin model, Ricardian technology differences
Citation Format(s)
Technology, endowments, and the factor content of bilateral trade. / Lai, Huiwen; Zhu, Susan Chun.
In: Journal of International Economics, Vol. 71, No. 2, 04.2007, p. 389-409.
In: Journal of International Economics, Vol. 71, No. 2, 04.2007, p. 389-409.
Research output: Journal Publications and Reviews › RGC 21 - Publication in refereed journal › peer-review