Technology, Factor Supplies, and International Specialization

Posted: 27 Feb 1998

See all articles by James Harrigan

James Harrigan

University of Virginia - Department of Economics; National Bureau of Economic Research (NBER)

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Abstract

The standard neoclassical model of trade theory predicts that international specialization will be jointly determined by cross-country differences in relative factor endowments and relative technology levels. This paper uses economic theory to specific an empirical model of specialization consistent with the neoclassical explanation. According to the empirical model, a sector's share in GDP depends on both relative factor supplies and relative technology differences, and the estimated parameters of the model have a close and clear connection to theoretical parameters. The model is estimated for manufacturing sectors using a twenty year, ten country panel of data on the industrialized countries. Relative technology levels and factor supplies are both found to be an important determinant of specialization.

JEL Classification: F1, F11

Suggested Citation

Harrigan, James, Technology, Factor Supplies, and International Specialization. Available at SSRN: https://ssrn.com/abstract=73974

James Harrigan (Contact Author)

University of Virginia - Department of Economics ( email )

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United States

National Bureau of Economic Research (NBER)

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