Factor supplies and specialization in the world economy

Arbeitspapier

A core prediction of the Heckscher-Ohlin theory is that countries specialize in goods in which they have a comparative advantage, and that the source of comparative advantage is differences in relative factor supplies. To examine this theory, we use the most extensive data set available and document the pattern of industrial specialization and factor endowment differences in a broad sample of rich and developing countries over a lengthy period (1970-92). Next, we develop an empirical model of specialization based on factor endowments, allowing for unmeasurable technological differences, and estimate it using panel data techniques. In addition to estimating the effects of factor endowments, we consider the alternative hypothesis that the level of aggregate productivity by itself can explain specialization. Our results clearly show the importance of factor endowments on specialization: relative endowments do matter.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Staff Report ; No. 107

Classification and Topics

• Classification: Wirtschaft
• Subject: Industrial location ; International trade ; Industrial productivity ; Faktorproportionentheorem ; Internationale Arbeitsteilung ; Welt

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Harrigan, James ; Zakrajések, Egon
• Event: Veröffentlichung
• (who): Federal Reserve Bank of New York
• (where): New York, NY
• (when): 2000

Further information

• Handle: http://hdl.handle.net/10419/60719
• Last update: 10.03.2025, 11:41 AM CET