Factor supplies and specialization in the world economy
By: James Harrigan, Egon Zakrajšek.
Contributors: Zakrajšek, Egon.; Federal Reserve Bank of New York.
Series: Staff reports ;; no. 107; Staff reports (Federal Reserve Bank of New York : Online) ;; no. 107.
Publisher: Federal Reserve Bank of New York
Published: 2000
Place of publication: [New York, N.Y.]
Language: eng
Format: Electronic resource
Subjects: Heckscher-Ohlin principle.; Factor proportions.; Comparative advantage (International trade); International finance.; Econometric models.; Commerce.
Description: "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"--Federal Reserve Bank of New York web site.
Notes: Includes bibliographical references.
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Mode of access: World Wide Web.