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Factor productivity differences and missing trade problems in a regional HOV model

Author

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  • Andrés Artal‐Tur
  • Carlos Llano‐Verduras
  • Francisco Requena‐Silvente

Abstract

Recent empirical papers testing the performance of the Heckscher‐Ohlin‐Vanek (HOV) model suggest the need to relax its restrictive assumptions in order to reconcile the theory with the data. This paper examines whether introducing factor productivity differences could help to improve the performance of the HOV model in a regional setting. Using a new dataset of 17 Spanish regions and three different HOV specifications, this paper seeks the existence of Hicks‐neutral (HN) or factor‐augmenting industry‐neutral (FAIN) technological differences. The data support the existence of HN technological differences, which contributes to a remarkable improvement of the regional HOV performance since the so‐called missing trade problem largely disappears. Algunos artículos empíricos recientes evaluando el desempeño del modelo Heckscher‐Ohlin‐Vanek (HOV) sugieren la necesidad de relajar sus suposiciones restrictivas para poder conciliar la teoría con los datos. Este artículo examina si el introducir diferencias en la productividad de los factores podría ayudar a mejorar el desempeño del modelo HOV en un marco regional. Mediante la utilización de un nuevo conjunto de datos de 17 regiones españolas y tres especificaciones diferentes de HOV, este artículo busca la existencia de diferencias tecnológicas neutrales en el sentido de Hicks (HN) o de un aumento de factores neutral en cuanto a la industria (FAIN). Los datos apoyan la existencia de diferencias tecnológicas HN, que contribuyen a una mejora notable del desempeño HOV regional ya que en gran medida desaparece el problema del así llamado comercio desaparecido.

Suggested Citation

  • Andrés Artal‐Tur & Carlos Llano‐Verduras & Francisco Requena‐Silvente, 2010. "Factor productivity differences and missing trade problems in a regional HOV model," Papers in Regional Science, Wiley Blackwell, vol. 89(4), pages 759-776, November.
    • Handle: RePEc:bla:presci:v:89:y:2010:i:4:p:759-776
    DOI: 10.1111/j.1435-5957.2009.00266.x
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    References listed on IDEAS

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    Cited by:

    1. Juan José García Ochoa & Juan de Dios León Lara & José Pablo Nuño de la Parra, 2017. "Proposal of a model to measure competitiveness through factor analysis," Contaduría y Administración, Accounting and Management, vol. 62(3), pages 792-809, Julio-Sep.
    2. Juan José García Ochoa & Juan de Dios León Lara & José Pablo Nuño de la Parra, 2017. "Propuesta de un modelo de medición de la competitividad mediante análisis factorial," Contaduría y Administración, Accounting and Management, vol. 62(3), pages 775-791, Julio-Sep.

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