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Country Size and Comparative Advantage: An Empirical Study

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  • Torstensson, Johan

Abstract

We formulate a simple model that captures two recent hypotheses: (i) that countries with an abundant absolute endowment of skilled labour will be net exporters in R&D-intensive industries; and (ii) that countries with a large domestic market will be net exporters in scale-intensive industries. The hypotheses are empirically tested by studying the trade of each and every OECD country individually. Thereafter, we pool the data into one regression by introducing, simultaneously, country and industry characteristics. The results offer relatively strong support for hypothesis (i) and some support for hypothesis (ii).

Suggested Citation

  • Torstensson, Johan, 1997. "Country Size and Comparative Advantage: An Empirical Study," CEPR Discussion Papers 1554, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:1554
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Michael Freudenberg & Harald Trabold, 1999. "Vertikale Produktdifferenzierung im Außenhandel: Theoretische Grundlagen und empirischer Befund," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 68(3), pages 356-385.
    2. Antonio Ricci, Luca, 1999. "Economic geography and comparative advantage:: Agglomeration versus specialization," European Economic Review, Elsevier, vol. 43(2), pages 357-377, February.
    3. Strauss-Kahn, Vanessa, 2005. "Firms' location decision across asymmetric countries and employment inequality," European Economic Review, Elsevier, vol. 49(2), pages 299-320, February.
    4. Johan Torstensson, 1998. "Country size and comparative advantage: An empirical study," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), pages 590-611.

    More about this item

    Keywords

    Comparative Advantage; Country Size; Economic Geography; Trade;

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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