Specialization Patterns and the Factor Bias of Technology
AbstractDevelopment accounting exercises based on an aggregate production function find technology is biased in favor of a country's abundant production factors. We provide an explanation to this finding based on the Heckscher-Ohlin model. Countries trade and specialize in the industries that use intensively the production factors they are abundantly endowed with. For given factor endowment ratios, this implies smaller international differences in factor price ratios than under autarky. Thus, when measuring the factor bias of technology with the same aggregate production function for all countries, they appear to have an abundant-factor bias in their technologies.
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Bibliographic InfoPaper provided by IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University in its series Working Papers with number 321.
Date of creation: 2007
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Other versions of this item:
- Cuñat Alejandro & Maffezzoli Marco, 2007. "Specialization Patterns and the Factor Bias of Technology," The B.E. Journal of Macroeconomics, De Gruyter, vol. 7(1), pages 1-27, July.
- Cuñat, Alejandro & Maffezzoli, Marco, 2007. "Specialization Patterns and the Factor Bias of Technology," CEPR Discussion Papers 6290, C.E.P.R. Discussion Papers.
- F1 - International Economics - - Trade
- F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
- O4 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-03-24 (All new papers)
- NEP-DEV-2007-03-24 (Development)
- NEP-INO-2007-03-24 (Innovation)
- NEP-INT-2007-03-24 (International Trade)
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