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A many-cone world?

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  • Kiyota, Kozo

Abstract

The breakdown of global factor price equalization, or a single-cone world, is a central concern in various fields of economics. This paper examines the empirical validities of the following two claims: 1) the multiple-cone Heckscher–Ohlin (HO) model fits better than does the single-cone HO model; and 2) increases in the number of cones improve the fit of the model. One of the contributions of this paper is that it focuses simultaneously on factor endowments, production patterns, and wage disparities across economies. My empirical results support the first claim but not the second claim. The results suggest that although the multiple-cone model performs better than does the single-cone model, the increases in the number of cones do not necessarily result in better performance of the HO model.

Suggested Citation

  • Kiyota, Kozo, 2012. "A many-cone world?," Journal of International Economics, Elsevier, vol. 86(2), pages 345-354.
  • Handle: RePEc:eee:inecon:v:86:y:2012:i:2:p:345-354 DOI: 10.1016/j.jinteco.2011.09.003
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    Cited by:

    1. ITO Koji & Ivan DESEATNICOV & FUKAO Kyoji, 2017. "Japanese Plants' Heterogeneity in Sales, Factor Inputs, and Participation in Global Value Chains," Discussion papers 17117, Research Institute of Economy, Trade and Industry (RIETI).
    2. Lorenzo Rotunno & Adrian Wood, 2016. "Wage Inequality and Skill Supplies in a Globalised World," AMSE Working Papers 1634, Aix-Marseille School of Economics, Marseille, France.
    3. Archanun Kohpaiboon & Juthathip Jongwanich, 2014. "Global Production Sharing and Wage Premiums: Evidence from the Thai Manufacturing Sector," Asian Development Review, MIT Press, vol. 31(2), pages 141-164, September.
    4. Lorenzo Rotunno & Adrian Wood, 2015. "Wages and endowments in a globalised world," Economics Papers 2015-W11, Economics Group, Nuffield College, University of Oxford.
    5. Brakman, Steven & van Marrewijk, Charles, 2013. "Lumpy countries, urbanization, and trade," Journal of International Economics, Elsevier, pages 252-261.
    6. Kiyota, Kozo, 2013. "Skills and changing comparative advantage: The case of Japan," Japan and the World Economy, Elsevier, vol. 28(C), pages 33-40.
    7. Archanun Kohpaiboon & Juthatip Jongwanich, . "Global Production Sharing and Wage Premium: Evidence from Thai Manufacturing," Chapters, Economic Research Institute for ASEAN and East Asia (ERIA).

    More about this item

    Keywords

    Multiple cones; Heckscher–Ohlin model; Wages; Sectoral production patterns;

    JEL classification:

    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F2 - International Economics - - International Factor Movements and International Business
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models

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