Factor price equalisation in the UK?

Arbeitspapier

This paper develops a general test of factor price equalization that is robust to unobserved regional productivity differences, unobserved region-industry factor quality differences and variation in production technology across industries. We test relative factor price equalization across regions of the UK. Although the UK is small and densely-populated, we find evidence of statistically significant and economically important departures from relative factor price equalization. Our estimates suggest three distinct relative factor price areas with a clear spatial structure. We explore explanations for these findings, including multiple cones of diversification, region-industry technology differences, agglomeration and increasing returns to scale.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IFS Working Papers ; No. 02/11

Classification and Topics

• Classification: Wirtschaft ; Neoclassical Models of Trade ; Empirical Studies of Trade ; Semiparametric and Nonparametric Methods: General
• Subject: Relative Factor Prices ; Diversification Cones ; Technology ; Economic Geography ; Faktorpreisausgleich ; Produktivität ; Regionale Disparität ; Schätzung ; Großbritannien

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Bernard, Abdrew B. ; Redding, Stephen ; Schott, Peter K. ; Simpson, Helen
• Event: Veröffentlichung
• (who): Institute for Fiscal Studies (IFS)
• (where): London
• (when): 2002

Further information

• DOI: doi:10.1920/wp.ifs.2002.0211
• Handle: http://hdl.handle.net/10419/71556
• Last update: 10.03.2025, 11:41 AM CET