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The Factor Content of Heterogeneous Firm Trade

Author

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  • d’Artis Kancs

    () (European Commission ‐ Joint Research Centre (IPTS); Catholic University of Leuven (LICOS); Economics and Econometrics Research Institute (EERI))

  • Pavel Ciaian

    () (European Commission ‐ Joint Research Centre (IPTS); Catholic University of Leuven (LICOS); Economics and Econometrics Research Institute (EERI))

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 di§erences 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 ma jority of the 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 ma jority 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.

Suggested Citation

  • d’Artis Kancs & Pavel Ciaian, 2009. "The Factor Content of Heterogeneous Firm Trade," Working Papers 2009.6, International Network for Economic Research - INFER.
  • Handle: RePEc:inf:wpaper:2009.6
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    References listed on IDEAS

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    Cited by:

    1. 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.
    2. 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.

    More about this item

    Keywords

    Factor content; bilateral trade; relative factor abundance; technological diferences; agriculture; transaction costs;

    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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