Specialization Patterns and the Factor Bias of Technology
AbstractDevelopment accounting exercises based on an aggregate production function find technology is biased in favor of a country's abundant production factors. We provide an explanation for this finding based on the Heckscher-Ohlin model. Countries trade and specialize in the industries that use intensively the production factors they are abundantly endowed with. For given factor endowment ratios, this implies smaller international differences in factor price ratios than under autarky. Thus, when measuring the factor bias of technology with the same aggregate production function for all countries, they appear to have an abundant-factor bias in their technologies.
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Bibliographic InfoArticle provided by De Gruyter in its journal The B.E. Journal of Macroeconomics.
Volume (Year): 7 (2007)
Issue (Month): 1 (July)
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Web page: http://www.degruyter.com
Other versions of this item:
- Alejandro Cuñat & Marco Maffezzoli, 2007. "Specialization Patterns and the Factor Bias of Technology," Working Papers 321, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
- Cuñat, Alejandro & Maffezzoli, Marco, 2007. "Specialization Patterns and the Factor Bias of Technology," CEPR Discussion Papers 6290, C.E.P.R. Discussion Papers.
- F1 - International Economics - - Trade
- F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
- O4 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
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