Technology, factor supplies, and international specialization: estimating the neoclassical model
AbstractThe standard neoclassical model of trade theory predicts that international specialization will be jointly determined by cross-country differences in relative factor endowments and relative technology levels. This paper uses economic theory to specify an empirical model of specialization consistent with the neoclassical explanation. According to the empirical model, a sector's share in GDP depends on both relative factor supplies and relative technology differences, and the estimated parameters of the model have a close and clear connection to theoretical parameters. The model is estimated for manufacturing sectors using a twenty-year, ten-country panel of data on the industrialized countries. Relative technology levels and factor supplies are both found to be an important determinant of specialization.
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Bibliographic InfoPaper provided by Federal Reserve Bank of New York in its series Staff Reports with number 15.
Date of creation: 1996
Date of revision:
Publication status: Published in American Economic Review 87, no. 4 (September 1997): 475-94
Other versions of this item:
- Harrigan, James, 1997. "Technology, Factor Supplies, and International Specialization: Estimating the Neoclassical Model," American Economic Review, American Economic Association, vol. 87(4), pages 475-94, September.
- James Harrigan, 1996. "Technology, Factor Supplies and International Specialization: Estimating the Neoclassical Model," NBER Working Papers 5722, National Bureau of Economic Research, Inc.
- F1 - International Economics - - Trade
- F11 - International Economics - - Trade - - - Neoclassical Models of Trade
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