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Abstract The chain version of the Heckscher-Ohlin theorem has only been tested by Cavusoglu and Elmslie (2005), with findings that fail to provide empirical support to its predictions. The present paper expands on that study and presents different results. Using data on capital-labor intensities, and exports and imports for ten manufacturing and three service sectors for the U.S. from 1970 to 2009, the predictions of the theory are confirmed by the data. These results are robust to different price indices, labor measures, and weight measures used to construct net export data. The difference in results between the two studies can be explained by the use of different capital stock data, as well as the longer time frame of the current study. [ABSTRACT FROM AUTHOR]

We investigate migration and foreign direct investment (FDI) for a small trading economy. Historically, immigration in small countries has been accompanied by FDI inflows (complementary capital movements). Based on the skill composition of migrants, empirical evidence finds that skilled immigration is accompanied by FDI inflows but unskilled immigration is accompanied by FDI outflows (substitutable capital movements). We prove that the Heckscher-Ohlin model cannot reconcile these apparently contradictory observations. We introduce a theoretical model in which capital and unskilled labor are sector specific, and demonstrate that this model can reconcile the historical and empirical observations on migration and FDI. [ABSTRACT FROM AUTHOR]

This paper uses a Heckscher-Ohlin nugget framework with both traded and non-traded goods. Traded goods are subject to tax whereas non-traded good does not pay tax but is beset with corruption related intermediation. Our motive is to investigate the comparison of the effects of corruption and tax cut. We assume only the non-traded sector to be corruption affected. We argue that a fall in the degree of corruption surprisingly increases the number of intermediators while tax change has no effect on it. But the size of the intermediation activities expands in both the cases. Low corruption diminishes the exportable production and raises importable production while a tax cut does not have any such effect. The welfare implication is ambiguous in case of a decrease in cost of corruption. A tax cut, however, raises welfare unambiguously. [ABSTRACT FROM AUTHOR]

The article offers the author's insightcs on the approach to the theory and practice of free trade market in Japan and Australia. Topics discussed by the author include comparative advantage in the concept of international trade, differentiation of free trade under the Heckscher-Ohlin model, and imperfection of economies of scale.

The practice of using Revealed Comparative Advantage (RCA) Indices to determine the flow of goods trade among countries is well established. But an important issue that demands attention is whether the RCA indices reflect the essentials of comparative advantage theory. Deb and Basu Foreign Trade Rev 46(3):3-28, (2011) examined the consistency of alternative RCA indices with the Heckscher-Ohlin theory of comparative advantage, leaving scope for re-examination of the indices in the context of the Ricardian comparative advantage theory, which insists on relative factor productivity differences among countries contrary to Heckscher-Ohlin's relative factor endowment differences. The other issue which has been overlooked in much of the existing literature is the importance of value-added trade. With the growing importance of global production chains, RCA indices based on gross export values may not portray an accurate picture of the underlying comparative advantage of countries. In this context, adjusting the RCA indices to incorporate domestic value-added in exports seems to be quite relevant. This paper explores the consistency of RCA indices based on domestic value-added in exports with the Ricardian theory of comparative advantage using a panel data approach. A brief review on the structures of alternative RCA indices is also provided. The Log-of-Balassa index is found to be the best performer in this empirical examination, although the deficiencies of the index for cross-country or cross-commodity comparison must be acknowledged. The index of Yu et al. Ann Reg Sci 43(1):267-282, (2009) does possess the latter feature but in our study its performance is quite poor and hence its consistency with the Ricardian theory of comparative advantage is questionable. [ABSTRACT FROM AUTHOR]

The Heckscher-Ohlin model based on Ricardo's theory of comparative advantage maintains that countries should specialize in the production and exportation of products that they have relative factor endowments. Therefore, Nigeria has taken advantage of its favourable climatic condition to become among the largest producers and exporters of cocoa products in the world. Given that cocoa is also the topmost non-oil export product and earnings in Nigeria, this paper assesses its performance and determines the effects of external factors on production in the country. Nigeria's performance in the global cocoa market has been somewhat below expectations. Using OLS and Granger causality, the OLS regression results reveal that exports, trade openness, area harvested and domestic consumption have a positive influence on cocoa production in Nigeria. The Granger test shows that there exists bidirectional causality between the world price, trade openness and yield per hectare to cocoa production in the country. The results further confirmed a unidirectional causality running from cocoa output to exports. The government of Nigeria and trading partners should create a sound environment and some incentives to stimulate cocoa producers and exporters to increase production for export performance and revenue generation in the country. [ABSTRACT FROM AUTHOR]

According to the popular Heckscher-Ohlin model of international trade, a country is expected to export (import) those products whose production requires the intensive use of the factor of production that is in relative abundance (scarcity). Leontief (1953), using input-output data of the US economy for the year 1947, found that the US, an overwhelmingly capital-abundant country, exported labour-intensive products and imported capital-intensive ones. Clearly, the results contradicted the predictions of the Heckscher-Ohlin model and they were characterised as 'Leontief's paradox'. A number of explanations for the so-called paradox were offered and this paper briefly, but critically, evaluates these explanations as it examines whether or not Leontief's results persist in the case of the US economy during the period 1998-2012. [ABSTRACT FROM AUTHOR]

This paper investigates the political and economic consequences of signing preferential trade agreements (PTAs) in authoritarian countries. Based on the Heckscher–Ohlin model of international trade and theories of inequality and regime transition, this paper argues that dictators sign PTAs as a means of consolidating their authoritarian rule. Specifically, PTAs help dictators reduce economic inequality by enriching poor laborers and thereby attenuating the threat of regime collapse. We support our theory with the data from seventy-odd authoritarian regimes from 1960 to 2006, and contribute to ongoing debates about the effects of both income inequality and economic globalization on autocratic resilience. [ABSTRACT FROM AUTHOR]

This paper analyzes the export destinations of Malaysia and top six trading partners (an average from 1995 - 2012) using gravity model and pooled ordinary least square (OLS) analysis. As suggested by the pioneer of gravity model (Tinbergen, 1962), the vibrancy of trading activities depend on the resemblance of exporting and importing countries which in parallel with Staffan Linder theory of trade(1961). These include similarities such as GDP per capita, international language, and border sharing and taste in product consumed (Morales, Sheu and Zahler, 2014).The theory also highlights that the distance between the two trading countries have significant effect on trading activities. However, the empirical study in the case of Malaysia proven opposite effect thus allowing Heckscher-Ohlin theory to be highlighted in contrast to Linder theory as H-O theory suggests that a particular country will trade with another country with dissimilar economic performance level. The general finding of this study suggest that Malaysia is more towards Linder theory based on the coefficient sign of GDP per capita differential. [ABSTRACT FROM AUTHOR]

This paper investigates how authoritarian leaders employ trade openness as a response to rising inequality. Based on the Heckscher-Ohlin model of international trade and models of democratic transition, I argue that unskilled laborers in authoritarian regimes can benefit from engaging in international trade, thus becoming more compliant to the authoritarian rules as their countries integrate into the world economy. Therefore, dictators in labor-abundant countries expand trade to neutralize democratization threats initiated by rising inequality. My argument uses supporting data from around eighty authoritarian regimes during the period from 1963 to 2003. I address endogeneity problems with dynamic panel data and instrumental variable regression models in this paper. My analyses suggest that economic globalization helps strengthen authoritarian regimes. [ABSTRACT FROM AUTHOR]

This paper argues that a country's comparative advantage in exports depends on both the factor abundance and the allocation efficiency of the endowments. However, the latter is not considered in the traditional Heckscher- Ohlin model. In line with the 'sand' view of corruption, this paper empirically studies the role of corruption in shaping a country's export pattern by distorting the allocation of financial resources. We find that the resource misallocation resulting from corruption undermines the export growth promoted by the positive external financial shock. The negative effects are realized by the extensive margins instead of the intensive margins of heterogeneous firms. [ABSTRACT FROM AUTHOR]

How does factor accumulation affect an open economy's pattern of international specialization and returns to capital? We provide a new integrated treatment to this question using a panel of 44 developing and developed countries over the period 1976-2000. The data confirm the Heckscher-Ohlin prediction that, with sufficient differences in country endowments, there is no factor price equalization and countries specialize in different subsets of goods. Innovatively, we obtain the returns to capital implied by this model: these are consistent with the Lucas paradox, which we explain after accounting for cross-country differences in the cost of capital goods. Our findings are also consistent with Ventura's hypothesis that the growth of small open economies can be promoted by "beating the curse of diminishing returns" -- indeed we find no decrease in the return to capital at any given capital-labor ratio despite capital accumulation by most countries within a cone of diversification. [ABSTRACT FROM AUTHOR]

We study, both theoretically and empirically, how trade imbalances affect the structure of countries' exports and wage inequality. We show that, in a Heckscher-Ohlin model with a continuum of goods, a Southern (Northern) trade surplus leads to an increase (reduction) in the average skill intensity of exports, in the relative demand for skills and in the skill premium in both countries. We provide robust support for the mechanism underlying these predictions using a large panel of countries observed over the past 30 years. Our results suggest that the large and growing North-South trade imbalances arisen over the last three decades may have exacerbated wage inequality worldwide. [ABSTRACT FROM AUTHOR]

This article examines the implications of international outsourcing in the Heckscher–Ohlin model of general equilibrium by explicitly expounding the external effects to the outsourcing firms. With its focus paced on the labor-augmenting effect of outsourcing, it shows that (a) the standard result of welfare-enhancing outsourcing always holds in the absence of external effects, and (b) in the presence of external effects, however, (i) outsourcing may be welfare-reducing for the outsourcing country; (ii) the effects of outsourcing on sectoral outputs, employment and factor prices depend on factor-intensity ranking, and the signs and the relative magnitudes of the sectoral returns to scale. [ABSTRACT FROM AUTHOR]

In the post-war period, the goods composition of trade in Organisation for Economic Cooperation and Development (OECD) countries has changed considerably. We analyze the evolution of comparative advantage using a detailed trade data set and a new analytical tool: the Harmonic Mass index (HM index), which enables us to identify periods of structural change. We then discuss which forces may be responsible for the main structural changes, which primarily took place in many OECD countries in the mid 1980s. The advantage of the HM analysis is that it indicates when structural breaks occur in history. [ABSTRACT FROM AUTHOR]

'Bubble' diagrams are quite useful in revealing some of the properties found in the competitive models of international trade. These diagrams use circles (bubbles) to indicate commodity outputs and connecting lines to indicate factor inputs. Models such as the 2 × 2 and n × n Heckscher- Ohlin models as well as the 3 × 2 (and extensions) specific factors model are discussed. For example, a model with some factor mobility between countries (say capital into a foreign enclave) is discussed for both model types. As well, close analogies are made to issues in labour economics in which both skilled and unskilled labour are used as inputs. [ABSTRACT FROM AUTHOR]

In partial equilibrium, a reduction in import barriers may be thought to lead to an increase in imports and a reduction in trade surplus. However, the general equilibrium e¤ect can go in the opposite direction. We study how trade reforms affect current accounts by embedding a modifed Heckscher-Ohlin structure and an endogenous discount factor into an intertemporal model of current account. We show that trade liberalizations in a developing country would generally lead to capital outflow. In contrast, trade liberalizations in a developed country would result in capital inflow. Thus, effcient trade reforms can contribute to global current account imbalances, but these imbalances do not need policy "corrections". [ABSTRACT FROM AUTHOR]

Sub-Saharan African (SSA) countries tend to trade less among themselves. This article analyzes the driving forces of bilateral trades within the SSA region. To do so, I use the gravity equations from and study what trade theories, the Heckscher-Ohlin theory of factor abundance or the increasing return to scale theory of product differentiation, account for the bilateral trade flows within this region. My results indicate that trades within this region do not arise from factor abundance or product differentiation. Trade policies that are aimed to promote trade within the region (i.e. FTA, custom unions) are likely to fail, because SSA countries produce similar homogeneous products. The key factor for economic success from international trade for the SSA region relies on how to manufacture products in different varieties and how to export their comparative advantage goods outside the region. [ABSTRACT FROM AUTHOR]

In 2004 and 2007, twelve New Member States (NMS) joined the European Union (EU), causing several changes in the field of agriculture. One of the major changes was the transformation of the national agri-food trade. The aim of the paper is to analyse the effects of the EU accession on the NMS agri-food trade, especially considering the revealed comparative advantages. The results suggest that the intensity of the NMS agri-food trade has increased significantly after the accession, though there was a serious deterioration in the NMS agri-food trade balance in most cases. It has also become evident that the NMS agri-food trade was highly concentrated by country and by product, though the concentration has not changed significantly after the EU accession. Moreover, our analyses highlight one of the most important characteristics of the NMS agri-food trade structure -- the focus on the agri-food raw materials in export together with the agri-food processed products in import. As to the NMS agri-food trade specialisation, the diversity among member states becomes apparent. Almost all countries experienced a decrease in their comparative advantage after the accession, though it still remained at an acceptable level in most cases. As for the stability of the comparative advantage, the results suggest a weakening trend, underpinned by the convergence of the pattern of revealed comparative advantage. By estimating the survival function to the sample, it can be observed that the accession has radically changed the survival time of agri-food trade, meaning that the revealed comparative advantage has not turned out to be persistent in the period analysed. From the policy perspective, there is a clear need for structural changes in the NMS agriculture and agri-food sector in order to tackle the negative tendencies of the national agri-food trade. The most important long-term goal should be the production and export of higher value-added processed products based on domestic raw materials. [ABSTRACT FROM AUTHOR]

The study analyzes the trends in the Indian poultry products' exports during the pre- and the post-WTO periods using the Hodrick-Prescott (HP) filtered data. The Simpson Diversity Index (SDI) was used to measure the export diversity, whereas the Revealed Comparative Advantage (RCA) and the Revealed Symmetric Comparative Advantage (RSCA) ratios assessed the competitiveness of poultry products in the international market. India has been highly competitive in the exports of hen-eggs-in-shell and eggs-dried, whereas India needs to maintain its competitive position with respect to eggs-liquid and live-ducks. India could not retain its competitive position in live chicken exports due to the rising production cost coupled with the onslaught of the Avian Influenza (AI) in the recent years. Spreading of the AI put a heavy toll on poultry exports, especially chicken meat and eggs-liquid due to a complete ban on Indian poultry products imposed by many of the importing countries. The SDI indicated that poultry products' exports were more diversified during the post-WTO period. On the basis of the available data on the average ad-valorem applied duties faced by the Most Favoured Nations (MFN), the producers' price in various countries for chicken meat and eggs (hen-egg-in shell) and shipping charges from India to various countries, the lucrative export destinations for such poultry products were identified. [ABSTRACT FROM AUTHOR]

Jan Tinbergen, galardonado con el primer Premio Nobel de Economía en 1969, participó a finales de ese mismo año en una reunión de economistas que la OIT había convocado con el fin de fijar las prioridades en materia de investigación del recién creado Programa Mundial del Empleo. En su ponencia Tinbergen examinó la influencia de la política comercial internacional en la capacidad de creación de empleo. En su opinión, las políticas restrictivas — en especial con respecto al comercio de productos agropecuarios y textiles —, así como los obstáculos comerciales con que tropiezan los productos de alto valor añadido, perjudican al comercio basado en ventajas comparativas, según el principio de Heckscher-Ohlin. En el artículo aquí reproducido el autor explica también sobre qué base clasificar las industrias con arreglo a la intensidad relativa de los factores de producción, a fin de lograr una división internacional del trabajo óptima. Destaca sobre todo «que el mayor obstáculo para la buena elección de las industrias más indicadas para los países en vías de desarrollo es en este momento la política comercial restrictiva que siguen los países desarrollados», aunque también critica los obstáculos establecidos por los países menos adelantados. Su sólida argumentación contribuyó a la reducción de los obstáculos al comercio observada desde entonces y consolidó la idea de que puede fomentarse el empleo corrigiendo las deformaciones del sistema comercial. [ABSTRACT FROM AUTHOR]

This paper empirically investigates the relative importance of productivity, factor endowments, trade costs, and tastes in determining the current pattern of trade and specialization. The results show that productivity and taste differences are the first and second most significant determinants of trade and specialization. Factor endowments are the least influential for the average country in the data set, but their effects are much greater in the poorer than richer countries. The results also show the substantial role of trade costs, which is amplified through interactions with other determinants of trade. Trade costs affect the relative costs of intermediate inputs and final goods, link preferences with specialization, and reduce the geographical range of comparative advantages. [ABSTRACT FROM AUTHOR]

Is skill dispersion a source of comparative advantage? In this paper we use microdata from the International Adult Literacy Survey to show that the effect of skill dispersion on trade flows is quantitatively similar to that of the aggregate endowment of human capital. In particular we investigate, and find support for, the hypothesis that countries with a more dispersed skill distribution specialize in industries characterized by lower complementarity of workers' skills. The result is robust to the introduction of controls for alternative sources of comparative advantage, as well as to alternative measures of industry-level skill complementarity. ( JEL F14, F16, J24, J31) [ABSTRACT FROM AUTHOR]

The index of revealed comparative advantages was first introduced by Liesner (1958) and operationalized by Balassa (1965) in order to measure comparative advantages. The RCA index of a country for a product is often measured by the product's share in the country's exports in relation to its share in world trade. The index of RCA (called the Balassa Index), is used to measure the relative importance of a product in a country's export composition relative to that products's relative importance in world trade or any country. In this study, between the years 2000-2008, indices of the revealed comparative advantages of Turkey and Syria are calculated on SITC Revision3, 2 digit codes and the comparative advantages and disadvantages of countries in question are examined among themselves. Turkey has accordingly got the revealed comparative disadvanteges against Syria (Syria has got the revealed comparative advanteges against Turkey) in 9 of 66 goods. The most goods which Syria has got the revealed comparative advanteges against Turkey are "group 0 (Food and Live Animals)" and " group 2 (Dairy Products and Birds Eggs)". However, in the export of the other goods; Turkey has clearly got the revealed comparative advanteges (in 45 goods, strongly comparative advantages are available) against Syria. [ABSTRACT FROM AUTHOR]

The article analyses the general equilibrium effects of education as a user and producer of resources considering some features of the sector typical in developing countries, such as the presence of inefficiencies, in a model that nevertheless remains close to the Heckscher-Ohlin paradigm. Short- and long-term effects of education are considered and it is shown that the overall effects are linked to the efficiency with which endowments are produced. The analysis has implications for policymakers in developing countries with failing educational systems, as it suggests a relation between cost-effectiveness of policies and growth and not between enrolments and growth or between public expenditure in education and growth as it is usually tested in growth regressions. [ABSTRACT FROM AUTHOR]

Abstract: This paper describes the process and results of an evaluation on an online game-based learning environment (GBLE) by focusing on learners’ motivational processing and cognitive processing. The goal is to explore how online GBLE might initiate and support learners’ goal-setting activities and impact learners’ cognitive loads. The study surveyed 144 undergraduate students after their autonomous participation in the online game available at the Nobel Prize Foundation website teaching the Heckscher–Ohlin Theory on international trade. Grounded in the integrative theory of motivation, volition, and performance (MVP), the evaluation indicated that participants felt significantly confident in learning the subject. The perceived satisfaction, however, was lower than the rest of motivational components possibly due to heavy cognitive processing. The finding of cognitive load reported that learners perceived a significantly higher level of intrinsic load than the germane load due to the novelty of the subject matter. Data analysis further indicated a significant canonical correlation between learners’ motivational and cognitive processing. This particular finding could inform future research to investigate specific motivational processing components’ effects on learners’ cognitive load levels in online GBLEs. [Copyright &y& Elsevier]

We formally analyze the pattern and volume of trade by embedding quasilinear preferences in the standard perfectly competitive, two-factor, two-good, two-country trade model. Quasilinear preferences deliver a natural partition of the two goods into a luxury and a necessity, and preserve the validity of the Heckscher-Ohlin and Heckscher-Ohlin-Vanek theorems. In addition, the predicted factor content of trade under quasilinear preferences is smaller (larger) than the predicted factor content of trade under homothetic preferences if and only if the luxury good is capital (labor) intensive. This result offers a novel explanation for the 'missing-trade' mystery. [ABSTRACT FROM AUTHOR]

Recent empirical papers testing the performance of the Heckscher-Ohlin-Vanek (HOV) model suggest the need to relax its restrictive assumptions in order to reconcile the theory with the data. This paper examines whether introducing factor productivity differences could help to improve the performance of the HOV model in a regional setting. Using a new dataset of 17 Spanish regions and three different HOV specifications, this paper seeks the existence of Hicks-neutral (HN) or factor-augmenting industry-neutral (FAIN) technological differences. The data support the existence of HN technological differences, which contributes to a remarkable improvement of the regional HOV performance since the so-called missing trade problem largely disappears. Algunos artículos empíricos recientes evaluando el desempeño del modelo Heckscher-Ohlin-Vanek (HOV) sugieren la necesidad de relajar sus suposiciones restrictivas para poder conciliar la teoría con los datos. Este artículo examina si el introducir diferencias en la productividad de los factores podría ayudar a mejorar el desempeño del modelo HOV en un marco regional. Mediante la utilización de un nuevo conjunto de datos de 17 regiones españolas y tres especificaciones diferentes de HOV, este artículo busca la existencia de diferencias tecnológicas neutrales en el sentido de Hicks (HN) o de un aumento de factores neutral en cuanto a la industria (FAIN). Los datos apoyan la existencia de diferencias tecnológicas HN, que contribuyen a una mejora notable del desempeño HOV regional ya que en gran medida desaparece el problema del así llamado comercio desaparecido. [ABSTRACT FROM AUTHOR]

Using the Heckscher–Ohlin trade model, I refute two prominent but incorrect claims on virtual water trade. These claims are that virtual water trade (i) levels uneven water distribution, and (ii) reduces the potential for water conflict. Both claims are based on an incorrect understanding of comparative advantage in the production of water-intensive goods. The results show that both claims only hold under certain conditions, but do not necessarily follow from the Heckscher–Ohlin trade model. [Copyright &y& Elsevier]

The purpose of this paper is to incorporate the currently mushrooming phenomenon of outsourcing into the standard two-sector, two-factor Heckscher–Ohlin model of international trade. We first show how outsourcing modifies a firm's production function, and then demonstrate that outsourcing generally raises the return to capital and lowers the real wage, although the nation's GDP rises in proportion to the value-added in the outsourcing industry. Furthermore, the output of the outsourcing sector may actually fall even though its unit cost goes down; the output of the other sector then rises. By contrast, employment in the outsourcing sector may actually rise. [ABSTRACT FROM AUTHOR]

This study demonstrates that the HO model proves useful for assessing the competitive factors in the delivery of services. However, further analysis that draws on the modeling framework of microeconomics and industrial organization is required. [ABSTRACT FROM AUTHOR]

This research paper emphasises how the competitive advantage is developed from two separate perspectives, one of them based on how the Ricardian model and the Heckscher-Ohlin model could help develop an economy based on trade attracted by using a newly created competitive advantage and in the same time by accentuating the idea of a sustainable side of the economy with the purpose to offer governments real life solution for creating policy for obtaining commercial trade, macroeconomic output and the bidirectional influence had by multinationals on the economy. [ABSTRACT FROM AUTHOR]

An empirical tradition in international trade seeks to establish whether the predictions of factor abundance theory match with the data. In this paper, we test if the "new" determinants used in the factor content version of H-O-V models (differences in productivity, in returns to scale or in consumers' preferences) help us to improve our estimation of trade patterns in commodities. The results show that conventional factors are still important in determining trade structure although new determinants need to be included to determine comparative advantage. Turning to the change across periods, differences in factor endowments have not diminished over time: we observe an increase in specialization according to skill endowment. Hence, those "new" determinants are not new forces that drive trade flows. [ABSTRACT FROM AUTHOR]

The advent of the U.S. Interstate Highway System provides an interesting experiment, which I use to identify the labor market effects of reduced trade barriers. This highway network was designed to connect cities and border crossings and to serve national defense, and as an unintended consequence it crossed many rural counties. I find that these counties experienced an increase in trade-related activities, such as trucking and retail sales. By increasing trade, the highways raised the relative demand for skilled manufacturing workers in skill-abundant counties and reduced it elsewhere, consistent with the predictions of the Heckscher-Ohlin model. [ABSTRACT FROM AUTHOR]

The change of Balassa's 'revealed comparative advantage' index is often directly used to measure comparative advantage variation over time, yet the theoretical foundation of this traditional measure has not been clarified. In this article we derive a 'revealed comparative advantage variation' index, which turns out to be a more general measure of comparative advantage variation than the traditional one. [ABSTRACT FROM AUTHOR]

We describe the evolving pattern of European countries' trade using recently developed empirical procedures based on the classic Balassa index. The extent of trade specialization exhibits a declining trend; European countries have lost their comparative advantage in a number of product groups over time. The indices of specialization have also tended to converge. For particular product groups, the indices display greater variation. They are stable for product groups with comparative disadvantage, but product groups with weak-to-strong comparative advantage show significant variation over time. The results reinforce the finding of a general decrease in specialization but do not support the idea of self-reinforcing mechanisms, strongly emphasized in much of the endogenous growth and trade literature. [ABSTRACT FROM AUTHOR]

The authors conduct an empirical study of the Heckscher-Ohlin-Vanek (HOV) model of trade using regional data rather than country data. Findings for Spanish regions suggest that relaxing the assumption of world factor price equalization alone is not enough to improve the performance of the HOV model. The supposition of world identical and homothetic preferences must also be relaxed. The authors also test whether Spanish regions share the same production techniques. Allowing for productivity-adjusted factor price equalization across regions or region-specific input-output matrices contributes very little toward improving the HOV model's predictive power, suggesting that the state of technology and choice of techniques is similar across Spanish regions. [ABSTRACT FROM AUTHOR]

In this article we investigate the empirical relationship between overall specialization and per capita income. The metric we use to measure overall specialization is the median of the sectoral distribution of the Balassa Index of Revealed Comparative Advantages applied to four-digit (SITC rev.2) sectoral export manufactured data for 39 countries over the period 1985 to 2001. Once we take into account countries' specificities using fixed effects GAM, the results of the semiparametric analysis indicate that sectoral diversification of manufactured exports increases monotonically with development, and thus the reconcentration observed at high levels of income in the recent literature may not be linked to trade-induced specialization. [ABSTRACT FROM AUTHOR]

Are individuals' attitudes towards globalization consistent with the predictions of the Heckscher-Ohlin (HO) theory? Using newly available data from the Flash Eurobarometer 151b of the European Commission, we find that globalization preferences are significantly and robustly correlated with an individual's relative level of human capital, consistent with the HO theory. The impact of skill on globalization preferences is positive in skill-abundant EU countries and strongly negative in EU countries that are well-endowed with low-skill labour. This study is the first to find a robust and significant negative association between skill and support to globalization in low-skill-abundant countries. [ABSTRACT FROM AUTHOR]

We present a dynamic two-country model of international trade with endogenous time preference. We show that if the two countries have similar preferences, production technologies and labor endowments, there exists a unique and stable steady state such that both consumption and investment goods are produced in both countries. Unlike the case of constant time preferences, the steady state is independent of the initial international distribution of capital. We prove a dynamic Heckscher–Ohlin theorem such that the labor-abundant country exports the labor-intensive good. [ABSTRACT FROM AUTHOR]

The authors show how the transformation loci in the specific factors model (capital specificity) and the Heckscher-Ohlin-Samuelson model (capital mobility) can be rigorously derived and easily compared by using geometric techniques on the basis of Savosnick geometry. The approach shows directly that the transformation locus with capital specificity has a greater degree of curvature than with capital mobility, given the same technology, and that the latter is an envelope of the former. It can also be used to show how incentives in the short run would lead to the long-run capital reallocation implied by the assumption of capital mobility. [ABSTRACT FROM AUTHOR]

This paper studies impacts of factor endowment on international trade in a general equilibrium model in which firms choose their technologies endogenously. Although countries only differ in factor endowment ex ante, countries may also differ in their chosen technologies. If industries choose different capital-labor intensities in equilibrium, the Heckscher-Ohlin theorem, factor price equalization theorem, the Rybczynski theorem, and the Stolper-Samuelson theorem hold. If industries choose the same capital-labor intensity in equilibrium, the volume of trade is zero. None of the four theorems applies. [ABSTRACT FROM AUTHOR]

A great deal of the current research into nineteenth- and twentieth-century globalisation has been focused through a neoclassical trade theory lens. Applying the Stopler-Samuelson paradigm from Heckscher-Ohlin trade theory, the result is an approach that sees price convergence as pivotal in defining, identifying, and measuring globalisation. This focus, however, obscures the implications of frontier incorporation and other insights achieved by viewing nineteenth-century globalisation as a mechanism whereby peripheral economies were incorporated into the core of organised economic activity. A frontier-centred perspective also reintroduces the role of economic institutions as a crucial element of economic growth and development. [ABSTRACT FROM AUTHOR]

A two-country model of oligopoly in general equilibrium is used to show how changes in market structure accompany the process of trade and capital-market liberalization. The model predicts that bilateral mergers in which low-cost firms buy out higher-cost foreign rivals are profitable under Cournot competition. As a result, trade liberalization can trigger international merger waves, in the process encouraging countries to specialize and trade more in accordance with comparative advantage. With symmetric countries, welfare is likely to rise, though the distribution of income always shifts towards profits. [ABSTRACT FROM AUTHOR]

This paper analyzes trade balances and unit values in Hungarian and Slovenian bilateral agricultural, food, and forestry trade with Austria, Germany, and Italy, respectively, to distinguish types of one-way and two-way trade flows, categories of price competition, and categories of quality competition. Two-way trade flows prevail among trade types. In two-way bilateral trade, categories of price competition prevail over categories of nonprice competition, but vary across trading partners. In Hungarian trade, successful price and quality competition prevail, suggesting comparative advantages for Hungarian produce arising from available agricultural factor endowments and technological improvements in processing compared with bilateral EU trading partners. In Slovenian two-way trade, unsuccessful price and quality competition prevail, suggesting comparative trade disadvantages arising from agricultural and structural disadvantages compared with bilateral EU trading partners. Looking dynamically, we find no significant catch-up in successful competition, as for Hungary, both successful price and successful nonprice competition increased only for Austria, but deteriorated for Germany and Italy. For Slovenia, successful price and nonprice competition remain at a similar level as Austria, but decline compared with Germany and Italy. The probability of remaining one-way trade is greater than the probability of staying within the same competition category in two-way trade. There are differences across countries and over individual years, but the mobility indices indicate decline in trade flow mobility, and thus, more stable trade patterns over time. [ABSTRACT FROM AUTHOR]

Is a country's ability to enforce contracts an important determinant of comparative advantage? To answer this question, I construct a variable that measures, for each good, the proportion of its intermediate inputs that require relationship-specific investments. Combining this measure with data on trade flows and judicial quality, I find that countries with good contract enforcement specialize in the production of goods for which relationship-specific investments are most important. According to my estimates contract enforcement explains more of the pattern of trade than physical capital and skilled labor combined. [ABSTRACT FROM AUTHOR]

This paper examines a two-country dynamic general equilibrium model with status-seeking agents. We show that the introduction of status-seeking behavior brings about new properties in equilibrium dynamics. While there exists a continuum of steady states in the standard dynamic models, the present framework demonstrates that, under some conditions, there uniquely exists an incompletely specialized steady state, which is locally saddle-point stable. Therefore, catching-up and overtaking phenomena seen in economic development can be explained, and comparative statics analysis also is made possible. Our comparative statics analysis illustrates, for example, that trade pattern is determined in the Heckscher–Ohlin manner; the patient country acts just like a capital abundant one to export the capital-intensive good. Furthermore, as distinct from the existing literature, the present study shows that the existence of an incompletely specialized steady state can be ensured even if the two countries conduct different policies. [ABSTRACT FROM AUTHOR]