IDEAS home Printed from https://ideas.repec.org/a/eee/inecon/v66y2005i1p233-248.html
   My bibliography  Save this article

Globalisation and factor returns in competitive markets

Author

Listed:
  • Falvey, Rod
  • Kreickemeier, Udo

Abstract

The standard competitive trade model, extended to include many goods and factors, is used to analyze the effect of goods and factor market integration on average international disparities in the real returns of internationally immobile factors. It is shown that goods market integration decreases international real return differentials for all factors. We derive sufficient conditions for this result to hold for the subgroup of internationally immobile factors as well. While there is a presumption for similar results to hold with international factor market integration, we show that this is true for international migration but in general not for international investment.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Falvey, Rod & Kreickemeier, Udo, 2005. "Globalisation and factor returns in competitive markets," Journal of International Economics, Elsevier, vol. 66(1), pages 233-248, May.
    • Handle: RePEc:eee:inecon:v:66:y:2005:i:1:p:233-248
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0022-1996(04)00076-5
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Copeland, Brian R, 1991. "Tourism, Welfare and De-industrialization in a Small Open Economy," Economica, London School of Economics and Political Science, vol. 58(232), pages 515-529, November.
    2. Alan V. DEARDORFF, 2011. "Firless Firwoes: How Preferences Can Interfere With The Theorems Of International Trade," World Scientific Book Chapters, in: Robert M Stern (ed.), Comparative Advantage, Growth, And The Gains From Trade And Globalization A Festschrift in Honor of Alan V Deardorff, chapter 13, pages 129-140, World Scientific Publishing Co. Pte. Ltd..
    3. Svensson, Lars E.O., 1984. "Factor trade and goods trade," Journal of International Economics, Elsevier, vol. 16(3-4), pages 365-378, May.
    4. Bond, Eric, 1993. "Trade, factor mobility, and income distribution in a regional model with compensating wage differentials," Regional Science and Urban Economics, Elsevier, vol. 23(1), pages 67-84, March.
    5. Alan V. Deardorff, 2011. "The possibility of factor price equalization, revisited," World Scientific Book Chapters, in: Robert M Stern (ed.), Comparative Advantage, Growth, And The Gains From Trade And Globalization A Festschrift in Honor of Alan V Deardorff, chapter 15, pages 155-163, World Scientific Publishing Co. Pte. Ltd..
    6. Alan V. Deardorff, 2011. "The General Validity of the Law of Comparative Advantage," World Scientific Book Chapters, in: Robert M Stern (ed.), Comparative Advantage, Growth, And The Gains From Trade And Globalization A Festschrift in Honor of Alan V Deardorff, chapter 10, pages 73-90, World Scientific Publishing Co. Pte. Ltd..
    7. Falvey, Rod, 1999. "Trade liberalization and factor price convergence," Journal of International Economics, Elsevier, vol. 49(1), pages 195-210, October.
    8. Markusen, James R & Svensson, Lars E O, 1985. "Trade in Goods and Factors with International Differences in Technology," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 26(1), pages 175-192, February.
    9. Charles Blackorby & William Schworm & Anthony Venables, 1993. "Necessary and Sufficient Conditions for Factor Price Equalization," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 60(2), pages 413-434.
    10. 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.
    11. Neary, Peter J., 1989. "Immigration and real wages," Economics Letters, Elsevier, vol. 30(2), pages 171-174, August.
    12. J. Peter Neary, 1985. "International Factor Mobility, Minimum Wage Rates, and Factor-Price Equalization: A Synthesis," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 100(3), pages 551-570.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Li, Kui-Wai, 2011. "The Optimal Level and Impact of Internal Factors on Growth," MPRA Paper 36419, University Library of Munich, Germany.
    2. Adam Blake & Ziliang Deng & Rod Falvey, 2009. "How does the productivity of foreign direct investment spill over to local firms in Chinese manufacturing?," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 7(2), pages 183-197.
    3. Udo Kreickemeier & Frode Meland, 2017. "Non-Traded Goods, Globalization, and Union Influence," World Scientific Book Chapters, in: International Trade and Labor Markets Welfare, Inequality and Unemployment, chapter 7, pages 173-201, World Scientific Publishing Co. Pte. Ltd..
    4. Kreickemeier, Udo & Meland, Frode, 2011. "International trade, union wage premia, and welfare in general equilibrium," University of Tübingen Working Papers in Business and Economics 5, University of Tuebingen, Faculty of Economics and Social Sciences, School of Business and Economics.
    5. Li, Kui-Wai & Pang, Iris A J & Ng, Michael C M, 2007. "Can Performance of Indigenous Factors Influence Growth and Globalization?," MPRA Paper 35299, University Library of Munich, Germany.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Falvey, Rod, 1999. "Trade liberalization and factor price convergence," Journal of International Economics, Elsevier, vol. 49(1), pages 195-210, October.
    2. 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.
    3. Svensson, Lars E O, 1988. "Trade in Risky Assets," American Economic Review, American Economic Association, vol. 78(3), pages 375-394, June.
    4. Svensson, Lars E.O., 1984. "Factor trade and goods trade," Journal of International Economics, Elsevier, vol. 16(3-4), pages 365-378, May.
    5. Noel Gaston & Douglas R. Nelson, 2013. "Bridging Trade Theory And Labour Econometrics: The Effects Of International Migration," Journal of Economic Surveys, Wiley Blackwell, vol. 27(1), pages 98-139, February.
    6. 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.
    7. Felbermayr, Gabriel & Grossmann, Volker & Kohler, Wilhelm, 2012. "Migration, International Trade and Capital Formation: Cause or Effect?," IZA Discussion Papers 6975, Institute of Labor Economics (IZA).
    8. Carol L. Osler, 1987. "Factor Prices and Welfare Under Integrated Capital Markets," NBER Working Papers 2447, National Bureau of Economic Research, Inc.
    9. Daniel Bernhofen, 2010. "The Empirics of General Equilibrium Tade Theory: What Have we Learned?," CESifo Working Paper Series 3242, CESifo.
    10. Harry P. Bowen & Jennifer Pédussel Wu, 2013. "Immigrant Specificity and the Relationship between Trade and Immigration: Theory and Evidence," Southern Economic Journal, John Wiley & Sons, vol. 80(2), pages 366-384, October.
    11. Xiang, Chong, 2001. "The sufficiency of the 'lens condition' for factor price equalization in the case of two factors," Journal of International Economics, Elsevier, vol. 53(2), pages 463-474, April.
    12. Louis Dupuy & Matthew Agarwala, 2014. "International trade and sustainable development," Chapters, in: Giles Atkinson & Simon Dietz & Eric Neumayer & Matthew Agarwala (ed.), Handbook of Sustainable Development, chapter 25, pages 399-417, Edward Elgar Publishing.
    13. Roger White, 2010. "Migration and International Trade," Books, Edward Elgar Publishing, number 13670.
    14. Gilroy, Bernard Michael, 1991. "Faktorgehalt und internationaler Handel [Factor content and international trade]," MPRA Paper 21037, University Library of Munich, Germany.
    15. Rod Tyers & Yongzheng Yang, 1997. "Trade with Asia and skill upgrading: Effects on labor markets in the older industrial countries," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 133(3), pages 383-418, September.
    16. Eleydiane Maria Gomes Vale & João Mário De Franç, 2014. "Cones De Diversificação E Comércio Exterior: Uma Análise Sobre Diferenças Salariais E Competitividade Industrial No Nordeste E Sudeste Do Brasil," Anais do XLI Encontro Nacional de Economia [Proceedings of the 41st Brazilian Economics Meeting] 109, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    17. 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".
    18. Makochekanwa, Albert, 2007. "Botswana’s revealed comparative advantage," MPRA Paper 34564, University Library of Munich, Germany.
    19. 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 Kiel).
    20. Schweinberger, Albert G., 2001. "Capital, heterogeneous labour, global goods markets and unemployment," Discussion Papers, Series I 309, University of Konstanz, Department of Economics.

    More about this item

    JEL classification:

    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:inecon:v:66:y:2005:i:1:p:233-248. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/505552 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.