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Factor Trade and Goods Trade

  • Lars E.O. Svensson

Previous work by Dixit and Woodland on the effect of inter-country factor endowment differences on goods trade is extended to include simultaneous factor trade and goods trade. The goods trade pattern with factor trade is compared to that without factor trade. It is for instance shown that goods trade and factor trade may be substitutes or complements, depending upon whether traded and nontraded factors are "cooperative" or "non-cooperative." The asymmetry between the effects of differences in endowments of traded and differences in endowments of nontraded factors is emphasized.

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File URL: http://www.nber.org/papers/w0999.pdf
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 0999.

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Date of creation: Oct 1982
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Publication status: published as Svensson, Lars E. O. "Factor Trade and Goods Trade." Journal of International Economics, Vol. 16, 1984, pp. 365-378.
Handle: RePEc:nbr:nberwo:0999
Note: ITI IFM
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  1. Jones, Ronald W & Scheinkman, Jose A, 1977. "The Relevance of the Two-Sector Production Model in Trade Theory," Journal of Political Economy, University of Chicago Press, vol. 85(5), pages 909-35, October.
  2. Dixit, Avinash & Woodland, Alan, 1982. "The relationship between factor endowments and commodity trade," Journal of International Economics, Elsevier, vol. 13(3-4), pages 201-214, November.
  3. Markusen, James R., 1983. "Factor movements and commodity trade as complements," Journal of International Economics, Elsevier, vol. 14(3-4), pages 341-356, May.
  4. Deardorff, Alan V, 1982. "The General Validity of the Heckscher-Ohlin Theorem," American Economic Review, American Economic Association, vol. 72(4), pages 683-94, September.
  5. Ruffin, Roy J., 1981. "Trade and factor movements with three factors and two goods," Economics Letters, Elsevier, vol. 7(2), pages 177-182.
  6. Ethier, Wilfred J., 1982. "The general role of factor intensity in the theorems of international trade," Economics Letters, Elsevier, vol. 10(3-4), pages 337-342.
  7. Woodland, Alan D, 1983. "Stability, Capital Mobility and Trade," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 24(2), pages 475-83, June.
  8. Jones, Ronald W. & Neary, J. Peter & Ruane, Frances P., 1983. "Two-way capital flows : Cross-hauling in a model of foreign investment," Journal of International Economics, Elsevier, vol. 14(3-4), pages 357-366, May.
  9. Jones, Ronald W. & Peter Neary, J., 1984. "The positive theory of international trade," Handbook of International Economics, in: R. W. Jones & P. B. Kenen (ed.), Handbook of International Economics, edition 1, volume 1, chapter 1, pages 1-62 Elsevier.
  10. Neary, J Peter, 1985. "International Factor Mobility, Minimum Wage Rates, and Factor-Price Equalization: A Synthesis," The Quarterly Journal of Economics, MIT Press, vol. 100(3), pages 551-70, August.
  11. Deardorff, Alan V, 1980. "The General Validity of the Law of Comparative Advantage," Journal of Political Economy, University of Chicago Press, vol. 88(5), pages 941-57, October.
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