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Factor Endowments and Production in European Regions

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Author Info
Redding, Stephen J
Vera-Martin, Mercedes

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Abstract

This Paper analyses patterns of production across 14 industries in 45 regions from seven European countries since 1975. We estimate a structural equation derived directly from neoclassical trade theory that relates an industry’s share of a region’s GDP to factor endowments, relative prices and technology. Although factor endowments play a statistically significant and quantitatively important role in explaining production patterns, the Heckscher-Ohlin model is rejected against more general alternatives that allow for regional variation in relative prices and technology. Factor endowments are more successful at explaining patterns of production in aggregate industries (Agriculture, Manufacturing, Services) than in disaggregated industries within Manufacturing.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 3755.

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Date of creation: Feb 2003
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Handle: RePEc:cpr:ceprdp:3755

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Keywords: european integration factor endowments heckscher-ohlin neoclassical model specialization

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Find related papers by JEL classification:
F11 - International Economics - - Trade - - - Neoclassical Models of Trade
F14 - International Economics - - Trade - - - Country and Industry Studies of Trade
R13 - Urban, Rural, and Regional Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies

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References listed on IDEAS
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Sue Fernie & Helen Gray, 2002. "Its a Family Affair: the Effect of Union Recognition and Human Resource Management on the Provision of Equal Opportunities in the UK," CEP Discussion Papers 0525, Centre for Economic Performance, LSE. [Downloadable!]
  2. Danny Quah, 2002. "Spatial Agglomeration Dynamics," CEP Discussion Papers 0521, Centre for Economic Performance, LSE. [Downloadable!]
    Other versions:
  3. Alan Manning, 2001. "Monopsony and the Efficiency of Labour Market Interventions," CEP Discussion Papers 0514, Centre for Economic Performance, LSE. [Downloadable!]
    Other versions:
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