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International differences in production techniques: Implications for the factor content of trade

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  • Nishioka, Shuichiro

Abstract

This paper examines how production techniques differ across countries, factors, and industries and considers its implications for previous empirical evidence on the Vanek prediction. I find that production techniques differ substantially across countries and factors, but differ much less across industries within a country. Davis and Weinstein (2001) argue that modeling cross-industry differences (multiple-cone specialization) improves the fit of the Vanek prediction; however, their test statistics are unchanged when one restricts techniques to be identical across industries within a country. Thus, the bulk of world factor content of trade does not arise from specialization.

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Bibliographic Info

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

Volume (Year): 87 (2012)
Issue (Month): 1 ()
Pages: 98-104

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Handle: RePEc:eee:inecon:v:87:y:2012:i:1:p:98-104

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

Related research

Keywords: Heckscher–Ohlin; Specialization across industries; Production technique;

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References

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  1. Donald R. Davis & David E. Weinstein, 1998. "An Account of Global Factor Trade," Harvard Institute of Economic Research Working Papers 1849, Harvard - Institute of Economic Research.
  2. Maskus, Keith E., 1985. "A test of the Heckscher-Ohlin-Vanek theorem: The Leontief commonplace," Journal of International Economics, Elsevier, vol. 19(3-4), pages 201-212, November.
  3. Harry P. Bowen & Edward E. Leamer & Leo Sveikauskas, 1986. "Multicountry, Multifactor Tests of the Factor Abundance Theory," NBER Working Papers 1918, National Bureau of Economic Research, Inc.
  4. Leamer, Edward E, 1980. "The Leontief Paradox, Reconsidered," Journal of Political Economy, University of Chicago Press, vol. 88(3), pages 495-503, June.
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  6. Patrick J. Conway, 2002. "The Case of the Missing Trade and Other Mysteries: Comment," American Economic Review, American Economic Association, vol. 92(1), pages 394-404, March.
  7. Trefler, Daniel & Zhu, Susan Chun, 2010. "The structure of factor content predictions," Journal of International Economics, Elsevier, vol. 82(2), pages 195-207, November.
  8. Helpman, E., 1998. "The Structure of Foreign Trade," Papers 18-98, Tel Aviv.
  9. Trefler, Daniel, 1993. "International Factor Price Differences: Leontief Was Right!," Journal of Political Economy, University of Chicago Press, vol. 101(6), pages 961-87, December.
  10. Trefler, Daniel, 1995. "The Case of the Missing Trade and Other Mysteries," American Economic Review, American Economic Association, vol. 85(5), pages 1029-46, December.
  11. Fadinger, Harald, 2011. "Productivity differences in an interdependent world," Journal of International Economics, Elsevier, vol. 84(2), pages 221-232, July.
  12. Dornbusch, Rudiger & Fischer, Stanley & Samuelson, Paul A, 1980. "Heckscher- Ohlin Trade Theory with a Continuum of Goods," The Quarterly Journal of Economics, MIT Press, vol. 95(2), pages 203-24, September.
  13. Keith E. Maskus & Shuichiro Nishioka, 2009. "Development-related biases in factor productivities and the HOV model of trade," Canadian Journal of Economics, Canadian Economics Association, vol. 42(2), pages 519-553, May.
  14. Peter K. Schott, 2004. "Across-product Versus Within-product Specialization in International Trade," The Quarterly Journal of Economics, MIT Press, vol. 119(2), pages 646-677, May.
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Cited by:
  1. Nishioka, Shuichiro, 2013. "R&D, trade in intermediate inputs, and the comparative advantage of advanced countries," Journal of the Japanese and International Economies, Elsevier, vol. 30(C), pages 96-110.

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