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Factor returns, institutions, and geography: a view from trade

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  • Scott L. Baier
  • Gerald P. Dwyer, Jr.
  • Robert Tamura

Abstract

The authors show that estimated productivities of labor and capital, which rationalize trade flows across countries, are related to total factor productivities, which rationalize output differences across countries. They present evidence that these productivities from trade are related to the institutions and geography across countries. Protection of property rights is the dominant influence on both labor and capital productivity, with geography less important and democracy even less important. The authors also present preliminary evidence that protection of property rights has similar effects on workers with only primary education as on those with more education.

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Bibliographic Info

Paper provided by Federal Reserve Bank of Atlanta in its series Working Paper with number 2004-17.

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Date of creation: 2004
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Handle: RePEc:fip:fedawp:2004-17

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Cited by:
  1. Philippe Darreau & Fran├žois Pigalle, 2012. "Why capital (physical and human) doesn't flow from rich to poor countries ?," Economics Bulletin, AccessEcon, vol. 32(2), pages 1353-1360.
  2. Fadinger, Harald, 2011. "Productivity differences in an interdependent world," Journal of International Economics, Elsevier, vol. 84(2), pages 221-232, July.
  3. Scott L. Baier & Gerald P. Dwyer, Jr., 2008. "Financial and real integration," Working Paper 2008-14, Federal Reserve Bank of Atlanta.

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