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Factor trade and goods trade


  • Svensson, Lars E.O.


Previous work by Dixit and Woodland on the effect of inter-country factor endowment differences on goods trade is extended to include simultaneous factor trade and goods trade. The goods trade pattern with factor trade is compared to that without factor trade. It is for instance shown that goods trade and factor trade may be substitutes or complements, depending upon whether traded and nontraded factors are "cooperative" or "non-cooperative." The asymmetry between the effects of differences in endowments of traded and differences in endowments of nontraded factors is emphasized.
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Suggested Citation

  • Svensson, Lars E.O., 1984. "Factor trade and goods trade," Journal of International Economics, Elsevier, vol. 16(3-4), pages 365-378, May.
  • Handle: RePEc:eee:inecon:v:16:y:1984:i:3-4:p:365-378

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    References listed on IDEAS

    1. Ruffin, Roy J., 1981. "Trade and factor movements with three factors and two goods," Economics Letters, Elsevier, vol. 7(2), pages 177-182.
    2. Markusen, James R., 1983. "Factor movements and commodity trade as complements," Journal of International Economics, Elsevier, vol. 14(3-4), pages 341-356, May.
    3. Ethier, Wilfred J., 1982. "The general role of factor intensity in the theorems of international trade," Economics Letters, Elsevier, vol. 10(3-4), pages 337-342.
    4. Jones, Ronald W. & Peter Neary, J., 1984. "The positive theory of international trade," Handbook of International Economics,in: R. W. Jones & P. B. Kenen (ed.), Handbook of International Economics, edition 1, volume 1, chapter 1, pages 1-62 Elsevier.
    5. Dixit, Avinash & Woodland, Alan, 1982. "The relationship between factor endowments and commodity trade," Journal of International Economics, Elsevier, vol. 13(3-4), pages 201-214, November.
    6. Jones, Ronald W & Scheinkman, Jose A, 1977. "The Relevance of the Two-Sector Production Model in Trade Theory," Journal of Political Economy, University of Chicago Press, vol. 85(5), pages 909-935, October.
    7. Woodland, Alan D, 1983. "Stability, Capital Mobility and Trade," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 24(2), pages 475-483, June.
    8. Jones, Ronald W. & Neary, J. Peter & Ruane, Frances P., 1983. "Two-way capital flows : Cross-hauling in a model of foreign investment," Journal of International Economics, Elsevier, vol. 14(3-4), pages 357-366, May.
    9. J. Peter Neary, 1985. "International Factor Mobility, Minimum Wage Rates, and Factor-Price Equalization: A Synthesis," The Quarterly Journal of Economics, Oxford University Press, vol. 100(3), pages 551-570.
    10. Deardorff, Alan V, 1980. "The General Validity of the Law of Comparative Advantage," Journal of Political Economy, University of Chicago Press, vol. 88(5), pages 941-957, October.
    11. Deardorff, Alan V, 1982. "The General Validity of the Heckscher-Ohlin Theorem," American Economic Review, American Economic Association, vol. 72(4), pages 683-694, September.
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    Cited by:

    1. Felbermayr, Gabriel & Grossmann, Volker & Kohler, Wilhelm, 2012. "Migration, International Trade and Capital Formation: Cause or Effect ?," FSES Working Papers 436, Faculty of Economics and Social Sciences, University of Freiburg/Fribourg Switzerland.
    2. Harry P. Bowen & Jennifer Pédussel Wu, 2013. "Immigrant Specificity and the Relationship between Trade and Immigration: Theory and Evidence," Southern Economic Journal, Southern Economic Association, vol. 80(2), pages 366-384, October.
    3. Linda S. Goldberg & Michael W. Klein, 1999. "International Trade and Factor Mobility: An Empirical Investigation," NBER Working Papers 7196, National Bureau of Economic Research, Inc.
    4. Svensson, Lars E O, 1988. "Trade in Risky Assets," American Economic Review, American Economic Association, vol. 78(3), pages 375-394, June.
    5. Laura Alfaro & Sebnem Kalemli-Ozcan & Vadym Volosovych, 2008. "Why Doesn't Capital Flow from Rich to Poor Countries? An Empirical Investigation," The Review of Economics and Statistics, MIT Press, vol. 90(2), pages 347-368, May.
    6. Ethier, Wilfred J. & Svensson, Lars E. O., 1986. "The theoremes of international trade with factor mobility," Journal of International Economics, Elsevier, vol. 20(1-2), pages 21-42, February.
    7. Henry Thompson, 2013. "A Factor Tariff, Domestic Supply, and Income," Auburn Economics Working Paper Series auwp2013-12, Department of Economics, Auburn University.
    8. Vosgerau, Hans-Jürgen, 1987. "International capital movements and trade in an intertemporal setting," Discussion Papers, Series II 25, University of Konstanz, Collaborative Research Centre (SFB) 178 "Internationalization of the Economy".
    9. Meckl, Jürgen, 1994. "Migration, income redistribution, and international capital mobility," Discussion Papers, Series II 230, University of Konstanz, Collaborative Research Centre (SFB) 178 "Internationalization of the Economy".
    10. Falvey, Rod, 1999. "Trade liberalization and factor price convergence," Journal of International Economics, Elsevier, vol. 49(1), pages 195-210, October.
    11. repec:eee:touman:v:59:y:2017:i:c:p:1-6 is not listed on IDEAS
    12. Henry Thompson, 2013. "Energy Tariffs, Production, and Income in a Small Open Economy," Auburn Economics Working Paper Series auwp2013-11, Department of Economics, Auburn University.
    13. Gilroy, Bernard Michael, 1991. "Faktorgehalt und internationaler Handel
      [Factor content and international trade]
      ," MPRA Paper 21037, University Library of Munich, Germany.
    14. Rod Falvey & Udo Kreickemeier, 2017. "Globalization and Factor Returns in Competitive Markets," World Scientific Book Chapters,in: International Trade and Labor Markets Welfare, Inequality and Unemployment, chapter 1, pages 3-25 World Scientific Publishing Co. Pte. Ltd..
    15. Roger White, 2010. "Migration and International Trade," Books, Edward Elgar Publishing, number 13670.
    16. Klepper, Gernot & Stahler, Frank, 1998. "Sustainabilty in Closed and Open Economies," Review of International Economics, Wiley Blackwell, vol. 6(3), pages 488-506, August.
    17. Carol L. Osler, 1987. "Factor Prices and Welfare Under Integrated Capital Markets," NBER Working Papers 2447, National Bureau of Economic Research, Inc.
    18. Springer, Katrin, 2000. "Do We Have to Consider International Capital Mobility in Trade Models?," Kiel Working Papers 964, Kiel Institute for the World Economy (IfW).
    19. Klepper, Gernot & Stähler, Frank, 1995. "Sustainability and international trade in resources," Kiel Working Papers 712, Kiel Institute for the World Economy (IfW).
    20. Thompson, Henry, 2014. "Energy tariffs in a small open economy," Energy Economics, Elsevier, vol. 44(C), pages 63-67.
    21. Yoshiaki Nakada, 2017. "The energy price - commodity output relationship and the commodity price - commodity output relationship in a three-factor, two-good general equilibrium trade model with imported energy," Papers 1711.10096,

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