The Heckscher-Ohlin Model and the Network Structure of International Trade
AbstractThis paper estimates for 28 product groups a characteristic parameter that reflects the topological structure of its trading network. Using these estimates, it then describes how the structure of international trade has evolved during the 1980-2000 period. Thereafter, it demonstrates the importance of networks in international trade by explicitly accounting for their scaling properties when testing the prediction of the Heckscher-Ohlin model that factor endowment differentials determine bilateral trade flows. The results suggest that differences in factor endowments increase bilateral trade in goods that are traded in "dispersed" networks. For goods that are traded in "concentrated" networks, factor endowment differentials are less important.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 30187.
Date of creation: 2010
Date of revision:
Publication status: Published in International Review of Economics and Finance 2.20(2011): pp. 135-145
Networks; international trade; gravity model;
Other versions of this item:
- Baskaran, Thushyanthan & Blöchl, Florian & Brück, Tilman & Theis, Fabian J., 2011. "The Heckscher-Ohlin model and the network structure of international trade," International Review of Economics & Finance, Elsevier, vol. 20(2), pages 135-145, April.
- F15 - International Economics - - Trade - - - Economic Integration
- L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
- F10 - International Economics - - Trade - - - General
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