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The Factor Content of Trade

Author

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  • Donald R. Davis
  • David E. Weinstein

Abstract

Study of the factor content of trade has become a laboratory to test our ideas about how the key elements of endowments, production, absorption and trade fit together within a general equilibrium framework. Already a great deal of progress has been made in fitting these pieces together. Nevertheless, the existing research raises a great many questions that should help to focus empirical research in the coming years. Among the more pressing issues is a deeper consideration of the role of intermediates, the role of aggregation biases, and of differences in patterns of absorption. This work should provide a more substantial foundation for future policy work developed within a factor content framework.

Suggested Citation

  • Donald R. Davis & David E. Weinstein, 2001. "The Factor Content of Trade," NBER Working Papers 8637, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:8637
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    References listed on IDEAS

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    1. Davis, Donald R. & David E. Weinstein & Scott C. Bradford & Kazushige Shimpo, 1997. "Using International and Japanese Regional Data to Determine When the Factor Abundance Theory of Trade Works," American Economic Review, American Economic Association, vol. 87(3), pages 421-446, June.
    2. Donald R. Davis & David E. Weinstein, 2001. "Do Factor Endowments Matter for North-North Trade?," NBER Working Papers 8516, National Bureau of Economic Research, Inc.
    3. Donald R. Davis & David E. Weinstein, 2001. "An Account of Global Factor Trade," American Economic Review, American Economic Association, vol. 91(5), pages 1423-1453, December.
    4. Leamer, Edward E, 1980. "The Leontief Paradox, Reconsidered," Journal of Political Economy, University of Chicago Press, vol. 88(3), pages 495-503, June.
    5. Trefler, Daniel, 1993. "International Factor Price Differences: Leontief Was Right!," Journal of Political Economy, University of Chicago Press, vol. 101(6), pages 961-987, December.
    6. Dornbusch, Rudiger & Fischer, Stanley & Samuelson, Paul A, 1977. "Comparative Advantage, Trade, and Payments in a Ricardian Model with a Continuum of Goods," American Economic Review, American Economic Association, vol. 67(5), pages 823-839, December.
    7. Trefler, Daniel, 1995. "The Case of the Missing Trade and Other Mysteries," American Economic Review, American Economic Association, vol. 85(5), pages 1029-1046, December.
    8. Robert W. Staiger & Alan V. Deardorff & Robert M. Stern, 1987. "An Evaluation of Factor Endowments and Protection as Determinants of Japanese and American Foreign Trade," Canadian Journal of Economics, Canadian Economics Association, vol. 20(3), pages 449-463, August.
    9. Hakura, Dalia S., 2001. "Why does HOV fail?: The role of technological differences within the EC," Journal of International Economics, Elsevier, vol. 54(2), pages 361-382, August.
    10. David E. Weinstein & Donald R. Davis, 2000. "International Trade as an "Integrated Equilibrium": New Perspectives," American Economic Review, American Economic Association, vol. 90(2), pages 150-154, May.
    11. Deardorff, Alan V., 1984. "Testing trade theories and predicting trade flows," Handbook of International Economics,in: R. W. Jones & P. B. Kenen (ed.), Handbook of International Economics, edition 1, volume 1, chapter 10, pages 467-517 Elsevier.
    12. Brecher, Richard A & Choudhri, Ehsan U, 1982. "The Leontief Paradox, Continued," Journal of Political Economy, University of Chicago Press, vol. 90(4), pages 820-823, August.
    13. Bowen, Harry P & Leamer, Edward E & Sveikauskas, Leo, 1987. "Multicountry, Multifactor Tests of the Factor Abundance Theory," American Economic Review, American Economic Association, vol. 77(5), pages 791-809, December.
    14. Gordon H. Hanson & Robert C. Feenstra, 2000. "Aggregation Bias in the Factor Content of Trade: Evidence from U.S. Manufacturing," American Economic Review, American Economic Association, vol. 90(2), pages 155-160, May.
    15. Helpman, Elhanan, 1984. "The Factor Content of Foreign Trade," Economic Journal, Royal Economic Society, vol. 94(373), pages 84-94, March.
    16. Susan Chun Zhu & Daniel Trefler, 2000. "Beyond the Algebra of Explanation: HOV for the Technology Age," American Economic Review, American Economic Association, vol. 90(2), pages 145-149, May.
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    Citations

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    Cited by:

    1. Daniel M. Bernhofen, "undated". "The Empirics of General Equilibrium Trade Theory: What Have We Learned?," Discussion Papers 10/24, University of Nottingham, GEP.
    2. Andrés Artal & Juana Castillo & Francisco Requena, 2006. "Contrastación empírica del modelo de dotaciones factoriales para el comercio interregional de España," Investigaciones Economicas, Fundación SEPI, vol. 30(3), pages 539-576, September.
    3. Ju, Jiandong & Wei, Shang-Jin, 2005. "Endowment Versus Finance: A Wooden Barrel Theory of International Trade," CEPR Discussion Papers 5109, C.E.P.R. Discussion Papers.
    4. Robbins, Donald J., 2003. "The impact of trade liberalization upon inequality in developing countries : a review of theory and evidence," ILO Working Papers 993650553402676, International Labour Organization.
    5. Alejandro Cuñat & Marco Maffezzoli, 2007. "Can Comparative Advantage Explain the Growth of us Trade?," Economic Journal, Royal Economic Society, vol. 117(520), pages 583-602, April.
    6. Gustavsson, Patrik, 2002. "The Dynamics of European Industrial Structure," Working Paper Series 176, Trade Union Institute for Economic Research.
    7. Fadinger, Harald, 2011. "Productivity differences in an interdependent world," Journal of International Economics, Elsevier, vol. 84(2), pages 221-232, July.
    8. Alejandro Cunat & Marco Maffezzoli, 2004. "Neoclassical Growth and Commodity Trade," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 7(3), pages 707-736, July.
    9. Diez, Federico J. & Mora, Jesse & Spearot, Alan C., 2016. "Firms in international trade," Working Papers 16-25, Federal Reserve Bank of Boston.
    10. repec:ilo:ilowps:365055 is not listed on IDEAS
    11. Daniel M. Bernhofen & John C. Brown, 2005. "An Empirical Assessment of the Comparative Advantage Gains from Trade: Evidence from Japan," American Economic Review, American Economic Association, vol. 95(1), pages 208-225, March.
    12. Widell, Lars, 2005. "On Measurements of the Factor Content of Trade: - The Case of Sweden," Working Papers 2005:7, Örebro University, School of Business.
    13. Harald Fadinger, 2006. "Development Accounting in a Heckscher-Ohlin World," DEGIT Conference Papers c011_017, DEGIT, Dynamics, Economic Growth, and International Trade.

    More about this item

    JEL classification:

    • F1 - International Economics - - Trade

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