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Factor Content of Bilateral Trade: The Role of Firm Heterogeneity and Transaction Costs

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  • Kancs, d'Artis
  • Ciaian, Pavel

Abstract

In this paper we study the determinants of the factor content of the CEE agricultural trade. Examining empirically three hypothesis, which relate cross-country differences in technology, relative factor abundance and transaction costs and market imperfections to the factor content of trade we find that the first two hypotheses are confirmed by the majority of developed EU countries, but rejected by roughly one half of the CEE transition country pairs. Second, we find that when accounting for transaction costs of farm (re)organisation, both hypotheses are confirmed by the majority of the CEE country pairs. These findings provide empirical evidence of market imperfections, and particularly, of transaction costs of farm (re)organisation in the CEE.

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  • Kancs, d'Artis & Ciaian, Pavel, 2008. "Factor Content of Bilateral Trade: The Role of Firm Heterogeneity and Transaction Costs," Conference papers 331718, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    • Handle: RePEc:ags:pugtwp:331718
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    Cited by:

    1. Luboš Smutka & Mansoor Maitah & Miroslav Svatoš, 2018. "Czech Agrarian Trade Comparative Advantages Distribution in Relation to Developed and Developing Countries," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 66(4), pages 1001-1015.
    2. Lubos SMUTKA & Mansoor MAITAH & Miroslav SVATOS, 2018. "Changes in the Czech agrarian foreign trade competitiveness - different groups of partners' specifics," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 64(9), pages 399-411.
    3. D'Artis Kancs & Pavel Ciaian, 2010. "Factor content of bilateral trade: the role of firm heterogeneity and transaction costs," Agricultural Economics, International Association of Agricultural Economists, vol. 41(3‐4), pages 305-317, May.
    4. D'Artis Kancs & Pavel Ciaian, 2010. "Factor content of bilateral trade: the role of firm heterogeneity and transaction costs," Agricultural Economics, International Association of Agricultural Economists, vol. 41(3‐4), pages 305-317, May.
    5. Alexander Gocht & Pavel Ciaian & Maria Bielza & Jean-Michel Terres & Norbert Röder & Mihaly Himics & Guna Salputra, 2017. "EU-wide Economic and Environmental Impacts of CAP Greening with High Spatial and Farm-type Detail," Journal of Agricultural Economics, Wiley Blackwell, vol. 68(3), pages 651-681, September.
    6. Kofi Aaron A-O Agyei-Henaku & Charlotte Badu-Prah & Akua Agyeiwaa-Afrane & Ferguson K. Gidiglo & Francis Y. Srofenyoh & Justice G. Djokoto, 2024. "Foreign Direct Investment and Trade," Journal of Economics and Econometrics, Economics and Econometrics Society, vol. 67(3), pages 91-126.
    7. Pavel Ciaian & d’Artis Kancs, 2011. "The Impact Of Food Price Shock On Heterogeneous Credit Constrained Firms," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 82(2), pages 115-137, June.
    8. Luboš Smutka & Mansoor Maitah & Miroslav Svatoš, 2019. "The Czech Agrarian Trade Comparative Advantages Distribution Based on Value and Volume Approach," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 67(6), pages 1613-1625.
    9. Ciaian, Pavel & Kancs, d'Artis & Pokrivcak, Jan, 2011. "Comparative Advantages, Transaction Costs and Factor Content in Agricultural Trade: Empirical Evidence from the CEE - Vantaggi comparati, costi di transazione e contenuto dei fattori nel commercio agr," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 64(1), pages 67-101.
    10. Victor Rivas, 2012. "Structural Estimation of Variety Gains from Trade Integration in a Heterogeneous Firms Framework," Journal of Economics and Econometrics, Economics and Econometrics Society, vol. 55(2), pages 78-93.
    11. Alexander Gocht & Pavel Ciaian & Maria Bielza & Jean-Michel Terres & Norbert Röder & Mihaly Himics & Guna Salputra, 2016. "Economic and environmental impacts of CAP greening: CAPRI simulation results," JRC Research Reports JRC102519, Joint Research Centre.
    12. Ciaian, Pavel & Pokrivcak, Jan & Kancs, d'Artis, 2013. "Empirical Evidence of the Distributional Effects of the CAP in New EU Member States," Working papers 157117, Factor Markets, Centre for European Policy Studies.
    13. Ján POKRIVČÁK & Pavel CIAIAN & d'Artis KANCS, 2011. "Modelling the factor content of agricultural trade," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 57(8), pages 370-383.
    14. Pavel Ciaian & Dusan Drabik & Jan Falkowski & d'Artis Kancs, 2016. "Market Impacts of New Land Market Regulations in Eastern EU Member States," EERI Research Paper Series EERI RP 2016/02, Economics and Econometrics Research Institute (EERI), Brussels.
    15. Anna Bandlerová & Jarmila Lazíková, 2016. "Land lease contract and prior right of lessee to concluding the new land lease contract - case of Slovakia," Juridical Tribune - Review of Comparative and International Law, Bucharest Academy of Economic Studies, vol. 6(2), pages 304-320, December.
    16. d’Artis Kancs & Pavel Ciaian, 2012. "The Factor Content of Heterogeneous Firm Trade," The World Economy, Wiley Blackwell, vol. 35(3), pages 373-393, March.

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    More about this item

    Keywords

    International Relations/Trade; Research and Development/Tech Change/Emerging Technologies;

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade

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