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Ricardian-Heckscher-Ohlin comparative advantage: Theory and evidence

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  • Morrow, Peter M.

Abstract

This paper derives and estimates a unified and tractable model of comparative advantage due to differences in both factor abundance and relative productivity differences across industries. It derives conditions under which ignoring one force for comparative advantage biases empirical tests of the other. I emphasize two empirical results: First, factor abundance- and relative productivity-based models each possesses explanatory power when nesting the other as an alternate hypothesis. Second, productivity differences across industries do not bias tests of the HO model in my sample. However, I find weak and mixed evidence that Heckscher-Ohlin forces can potentially bias tests of the Ricardian model.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of International Economics.

Volume (Year): 82 (2010)
Issue (Month): 2 (November)
Pages: 137-151

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Handle: RePEc:eee:inecon:v:82:y:2010:i:2:p:137-151

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Web page: http://www.elsevier.com/locate/inca/505552

Related research

Keywords: Heckscher-Ohlin Ricardian Increasing returns to scale Omitted variable bias;

References

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Citations

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Cited by:
  1. William R. Kerr, 2013. "Heterogeneous Technology Diffusion and Ricardian Trade Patterns," NBER Working Papers 19657, National Bureau of Economic Research, Inc.
  2. Sato, Hitoshi, 2014. "Do electricity supply constraints matter for comparative advantage? : a neoclassical approach," IDE Discussion Papers 462, Institute of Developing Economies, Japan External Trade Organization(JETRO).
  3. Sarker, Rakhal & Ratnesena, Shashini, 2014. "Revealed Comparative Advantage and Half-A-Century Competitiveness of Canadian Agriculture: A Case Study of Wheat, Beef and Pork Sectors," Working Papers 165675, Canadian Agricultural Trade Policy Research Network.
  4. Regolo, Julie, 2013. "Export diversification: How much does the choice of the trading partner matter?," Journal of International Economics, Elsevier, vol. 91(2), pages 329-342.
  5. Julie Regolo, 2013. "Export Diversification: How Much Does the Choice of the Trading Partner Matter?," Research Papers by the Institute of Economics and Econometrics, Geneva School of Economics and Management, University of Geneva 13072, Institut d'Economie et Econométrie, Université de Genève.
  6. Cong S. Pham & Mehmet A. Ulubaşoğlu, 2013. "The Role Of Endowments, Technology And Size In International Trade: New Evidence From Product-Level Data," Economics Series 2013_8, Deakin University, Faculty of Business and Law, School of Accounting, Economics and Finance.
  7. Asier Minondo & Francisco Requena, 2012. "Complexity as a source of comparative advantage," Working Papers 1214, Department of Applied Economics II, Universidad de Valencia.

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