IDEAS home Printed from https://ideas.repec.org/p/wiw/wiwrsa/ersa10p610.html

Missing trade and lumpy countries

Author

Listed:
  • Charles Van Marrewijk

  • Steven Brakman

Abstract

Empirically, Trefler (1995) shows that actual trade flows deviate from predictions based on factor abundance theory in a systematic way (which he calls the 'case of the missing trade'). Theoretically, Courant and Deardorff (1992) show that an uneven distribution of factors of production across regions within a country (which they call 'lumpiness') affect aggregate trade flows at the country level. In particular, a country tends to export the good that intensively uses its more unevenly distributed factor of production. Based on the urban economics literature, we use a simple measure of the degree of lumpiness to show that Trefler's missing trade flows are systematically related to our measure of the degree of lumpiness. This implies that not only home bias and technology differences may explain the missing trade flows, but also the uneven distribution of factors of production.

Suggested Citation

  • Charles Van Marrewijk & Steven Brakman, 2011. "Missing trade and lumpy countries," ERSA conference papers ersa10p610, European Regional Science Association.
    • Handle: RePEc:wiw:wiwrsa:ersa10p610
    as

    Download full text from publisher

    File URL: https://www-sre.wu.ac.at/ersa/ersaconfs/ersa10/ERSA2010finalpaper610.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Courant Paul N. & Deardorff Alan V., 1993. "Amenities, Nontraded Goods, and the Trade of Lumpy Countries," Journal of Urban Economics, Elsevier, vol. 34(2), pages 299-317, September.
    2. Debaere, Peter & Demiroglu, Ufuk, 2003. "On the similarity of country endowments," Journal of International Economics, Elsevier, vol. 59(1), pages 101-136, January.
    3. Andrew B. Bernard & Raymond Robertson & Peter K. Schott, 2026. "Is Mexico a Lumpy Country?," World Scientific Book Chapters, in: Raymond Robertson (ed.), Not Just Neighbors The Remarkable Economic Relationships in North America, chapter 13, pages 443-464, World Scientific Publishing Co. Pte. Ltd..
    4. Briant, A. & Combes, P.-P. & Lafourcade, M., 2010. "Dots to boxes: Do the size and shape of spatial units jeopardize economic geography estimations?," Journal of Urban Economics, Elsevier, vol. 67(3), pages 287-302, May.
    5. Siu‐kee Wong & Kwan Koo Yun, 2003. "The Lens Condition with Two Factors," Review of International Economics, Wiley Blackwell, vol. 11(4), pages 692-696, September.
    6. Alan V. Deardorff, 2011. "The possibility of factor price equalization, revisited," World Scientific Book Chapters, in: Robert M Stern (ed.), Comparative Advantage, Growth, And The Gains From Trade And Globalization A Festschrift in Honor of Alan V Deardorff, chapter 15, pages 155-163, World Scientific Publishing Co. Pte. Ltd..
    7. Robert E. Baldwin, 2008. "The Development and Testing of Heckscher-Ohlin Trade Models: A Review," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262026562, December.
    8. Paul N. Courant & Alan V. Deardorff, 2011. "International Trade with Lumpy Countries," World Scientific Book Chapters, in: Robert M Stern (ed.), Comparative Advantage, Growth, And The Gains From Trade And Globalization A Festschrift in Honor of Alan V Deardorff, chapter 14, pages 141-154, World Scientific Publishing Co. Pte. Ltd..
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Brakman, Steven & van Marrewijk, Charles, 2013. "Lumpy countries, urbanization, and trade," Journal of International Economics, Elsevier, vol. 89(1), pages 252-261.
    2. Andrew B. Bernard & Raymond Robertson & Peter K. Schott, 2026. "Is Mexico a Lumpy Country?," World Scientific Book Chapters, in: Raymond Robertson (ed.), Not Just Neighbors The Remarkable Economic Relationships in North America, chapter 13, pages 443-464, World Scientific Publishing Co. Pte. Ltd..
    3. Steven Brakman & Tijl Hendrich & Charles van Marrewijk & Jennifer Olsen, 2023. "On the revealed comparative advantages of Dutch cities," Review of International Economics, Wiley Blackwell, vol. 31(3), pages 785-825, August.
    4. Steven Brakman & Tijl Hendrich & Charles van Marrewijk & Jennifer Olsen & Charles van Marrewijk, 2020. "The Comparative Advantage of Dutch Cities," CESifo Working Paper Series 8649, CESifo.
    5. Steven Brakman & Tijl Hendrich & Charles Marrewijk & Jennifer Olsen, 2022. "Is Holland a Lumpy Country? An application of the Lens-Condition to Dutch Cities," De Economist, Springer, vol. 170(3), pages 305-321, August.
    6. Debaere, Peter, 2004. "Does lumpiness matter in an open economy?: Studying international economics with regional data," Journal of International Economics, Elsevier, vol. 64(2), pages 485-501, December.
    7. repec:lje:journl:v:20:y:2015:i:1:p:105-133 is not listed on IDEAS
    8. Kazuyuki Nakamura, 2015. "Computational investigation of the feasibility of factor price equalization," Letters in Spatial and Resource Sciences, Springer, vol. 8(2), pages 101-108, July.
    9. Resham Naveed, 2015. "Relative Factor Abundance and Relative Factor Price Equality in Punjab," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 20(1), pages 105-133, Jan-June.
    10. Andrew B. Bernard & J. Bradford Jensen & Peter K. Schott, 2001. "Factor Price Equality and the Economies of the United States," NBER Working Papers 8068, National Bureau of Economic Research, Inc.
    11. Alan V. Deardorff, 2011. "Fragmentation in simple trade models," World Scientific Book Chapters, in: Robert M Stern (ed.), Comparative Advantage, Growth, And The Gains From Trade And Globalization A Festschrift in Honor of Alan V Deardorff, chapter 16, pages 165-181, World Scientific Publishing Co. Pte. Ltd..
    12. Kiyota, Kozo, 2012. "A many-cone world?," Journal of International Economics, Elsevier, vol. 86(2), pages 345-354.
    13. Andrew B. Bernard & Raymond Robertson & Peter K. Schott, 2005. "A Note on the Empirical Implementation of the Lens Condition," NBER Working Papers 11448, National Bureau of Economic Research, Inc.
    14. Daniel Bernhofen, 2010. "The Empirics of General Equilibrium Tade Theory: What Have we Learned?," CESifo Working Paper Series 3242, CESifo.
    15. Batista, Catia & Potin, Jacques, 2008. "International Specialization and the Return to Capital, 1976-2000," ESSEC Working Papers DR 08001, ESSEC Research Center, ESSEC Business School.
    16. Soo, Kwok Tong, 2017. "Indivisibilities in the Ricardian model of trade," Economic Modelling, Elsevier, vol. 63(C), pages 311-317.
    17. Louis Dupuy & Matthew Agarwala, 2014. "International trade and sustainable development," Chapters, in: Giles Atkinson & Simon Dietz & Eric Neumayer & Matthew Agarwala (ed.), Handbook of Sustainable Development, chapter 25, pages 399-417, Edward Elgar Publishing.
    18. Peter Debaere & Ufuk Demiroglu, 2003. "Factor Accumulation Without Diminishing Returns: The Case of East Asia: Technical Paper 2003-11," Working Papers 15113, Congressional Budget Office.
    19. Glenn Rayp, 1998. "An empirical test of the Dixit-Norman approach to factor price equalization, using cointegration techniques," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 134(3), pages 484-512, September.
    20. Catia Batista & Jacques Potin, 2007. "Heckscher-Ohlin Specialization and the Marginal Product of Capital, 1976-2000," Economics Series Working Papers 357, University of Oxford, Department of Economics.
    21. 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

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wiw:wiwrsa:ersa10p610. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Gunther Maier (email available below). General contact details of provider: http://www.ersa.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.