Headquarter Services and Revealed Factor Abundance

REVIEW OF INTERNATIONAL ECONOMICS

Posted: 21 Mar 1997

See all articles by Karolina Ekholm

Karolina Ekholm

Stockholm School of Economics - Department of Economics; Centre for Economic Policy Research (CEPR); Center for Business and Policy Studies (SNS); CESifo (Center for Economic Studies and Ifo Institute)

Abstract

This paper analyzes how usual measures of revealed factor abundance (RFA), based on trade in merchandise, are affected by the existence of trade in services of intangible assets; trade that is mainly associated with multinational firms. It presents empirical estimates of both usual measures of RFA and new measures that take account of trade in headquarter services for the United States; a country that has a substantial surplus in the recorded components of such trade. It is found that the usual measures underestimate the abundance of highly skilled labor and technological knowledge, and overestimate the abundance of physical capital.

JEL Classification: F11, F23

Suggested Citation

Ekholm, Karolina, Headquarter Services and Revealed Factor Abundance. REVIEW OF INTERNATIONAL ECONOMICS, Available at SSRN: https://ssrn.com/abstract=4757

Karolina Ekholm (Contact Author)

Stockholm School of Economics - Department of Economics ( email )

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Centre for Economic Policy Research (CEPR)

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Center for Business and Policy Studies (SNS)

Skoldungagatan 2, Box 5629
S-114 86 Stockholm
Sweden

CESifo (Center for Economic Studies and Ifo Institute)

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Munich, DE-81679
Germany

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