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Is Mexico a Lumpy Country?

  • Andrew B. Bernard
  • Raymond Robertson
  • Peter K. Schott

Courant and Deardorff (1992 ) show theoretically that an extremely uneven distribution of factors within a country can induce behavior at odds with overall comparative advantage. We demonstrate the importance of this insight for developing countries. We show that Mexican regions exhibit substantial variation in skill abundance, offer significantly different relative factor rewards, and produce disjoint sets of industries. This heterogeneity helps both to undermine Mexico's aggregate labor abundance and to motivate behavior that is more consistent with relative skill abundance. Copyright � 2010 Blackwell Publishing Ltd.

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Article provided by Wiley Blackwell in its journal Review of International Economics.

Volume (Year): 18 (2010)
Issue (Month): 5 (November)
Pages: 937-950

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Handle: RePEc:bla:reviec:v:18:y:2010:i:5:p:937-950
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  1. Repetto, A. & Ventura, J., 1997. "The Leontief-Trefler Hypothesis and Factor Price Insensitivity," Working papers 97-13, Massachusetts Institute of Technology (MIT), Department of Economics.
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