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Lumpy countries, urbanization, and trade

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  • Brakman, Steven
  • van Marrewijk, Charles

Abstract

Lumpiness of production factors within a country might overturn the Heckscher–Ohlin (HO) model's predictions for the factor content of trade. Trade patterns, as predicted by this model, can both be magnified or reversed by uneven concentration of production factors within a country. Cities are the most characteristic manifestation of lumpiness of production factors and as a consequence different patterns of urbanization between countries might cause trade patterns to differ from the HO model's predictions on the basis of the overall availability of production factors. Using data on cities we provide evidence that the so-called lens condition is violated, suggesting that from an urban perspective lumpiness matters.

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Bibliographic Info

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

Volume (Year): 89 (2013)
Issue (Month): 1 ()
Pages: 252-261

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Handle: RePEc:eee:inecon:v:89:y:2013:i:1:p:252-261

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

Related research

Keywords: Heckscher–Ohlin; Factor endowments; Agglomeration;

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References

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Cited by:
  1. Steven Brakman & Harry Garretsen & Charles van Marrewijk, 2014. "The Crisis and Regional Resilience in Europe: On the Importance of Urbanization and Specialization," CESifo Working Paper Series 4724, CESifo Group Munich.

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