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Lumpy countries, urbanization, and trade

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  • Brakman, Steven
  • van Marrewijk, Charles

Abstract

Lumpiness of production factors within a country might overturn the Heckscher–Ohlin (HO) model's predictions for the factor content of trade. Trade patterns, as predicted by this model, can both be magnified or reversed by uneven concentration of production factors within a country. Cities are the most characteristic manifestation of lumpiness of production factors and as a consequence different patterns of urbanization between countries might cause trade patterns to differ from the HO model's predictions on the basis of the overall availability of production factors. Using data on cities we provide evidence that the so-called lens condition is violated, suggesting that from an urban perspective lumpiness matters.

Suggested Citation

  • Brakman, Steven & van Marrewijk, Charles, 2013. "Lumpy countries, urbanization, and trade," Journal of International Economics, Elsevier, vol. 89(1), pages 252-261.
  • Handle: RePEc:eee:inecon:v:89:y:2013:i:1:p:252-261
    DOI: 10.1016/j.jinteco.2012.05.004
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    Cited by:

    1. Shiwei Hu & Steven Brakman & Charles van Marrewijk, 2014. "Smart Cities are Big Cities - Comparative Advantage in Chinese Cities," CESifo Working Paper Series 5028, CESifo Group Munich.
    2. Steven Brakman & Harry Garretsen & Charles van Marrewijk, 2014. "The Crisis and Regional Resilience in Europe: On the Importance of Urbanization and Specialization," CESifo Working Paper Series 4724, CESifo Group Munich.
    3. Steven Brakman & Charles Marrewijk & Mark Partridge, 2015. "Local Consequences Of Global Production Processes," Journal of Regional Science, Wiley Blackwell, vol. 55(1), pages 1-9, January.

    More about this item

    Keywords

    Heckscher–Ohlin; Factor endowments; Agglomeration;

    JEL classification:

    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F15 - International Economics - - Trade - - - Economic Integration
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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