Factor Content of Intra-European Trade Flows
AbstractIn recent decades, the international division of labor expanded rapidly in course of globalization. In this context, highly developed countries specialized on (human) capital intensively manufactured goods and increasingly sourced parts and components from lowwage countries. Since this should be beneficial for the high-skilled and harmful for the lower qualified workforce, especially the opening up of Eastern Europe and the international integration of newly industrializing Asian economies are considered as main reasons for increasing unemployment of the lower qualified in high-wage countries. The present paper addresses this issue for selected Western European countries by analyzing factor content of trade, which allows inferring on factor demand patterns resulting from international trade. This is not only done for countries’ total external trade, but also for bilateral trade flows, using input-output analyses. Thereby, differences in factor inputs and production technologies are considered, allowing for product differentiation. According to the results, factor content of bilateral trade flows between Western European high-wage countries does hardly differ. However, the results are different for East-West trade, since exports from Western to Eastern Europe are distinctly more human capital intensively manufactured than imports of Western European high-wage countries from Eastern Europe.
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Bibliographic InfoPaper provided by Halle Institute for Economic Research in its series IWH Discussion Papers with number 6.
Date of creation: Mar 2011
Date of revision:
European integration; international trade; labor markets; input-output analysis;
Find related papers by JEL classification:
- C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
- F11 - International Economics - - Trade - - - Neoclassical Models of Trade
- F15 - International Economics - - Trade - - - Economic Integration
- F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-03-26 (All new papers)
- NEP-EEC-2011-03-26 (European Economics)
- NEP-EUR-2011-03-26 (Microeconomic European Issues)
- NEP-HME-2011-03-26 (Heterodox Microeconomics)
- NEP-TRA-2011-03-26 (Transition Economics)
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.:
- Marcel P. Timmer & Mary O’Mahony & Bart van Ark, 2007. "EU KLEMS Growth and Productivity Accounts: An Overview," International Productivity Monitor, Centre for the Study of Living Standards, vol. 14, pages 71-85, Spring.
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