Skill Content Tests of Endowment Models of Inter-And Intra-Industry Trade: Evidence for Some High Income Countries

University of Nottingham Research Paper No. 2006/20

25 Pages Posted: 3 Aug 2006

See all articles by Manuel Heredia Cabral

Manuel Heredia Cabral

University of Minho

Rod Falvey

Bond University - Department of Economics

Chris Milner

University of Nottingham - School of Economics

Date Written: 2006

Abstract

The present study compares the results of factor (skill) content tests for different types of trade flows under alternative assumptions about the technologies used to produce imports and exports. Using data on trade, technologies (skill requirements) and national endowments for some high income countries, we show that the match between the actual factor content of trade and that predicted by endowments in an H-O-V framework improves substantially if technological heterogeneity across countries is allowed for and if the factor content of intra- industry trade (in particular in vertically differentiated goods) is included along with that in inter-industry or net trade.

Keywords: Skill Content Tests, Intra-Industry Trade, Technology Differences

JEL Classification: F11, F14

Suggested Citation

Cabral, Manuel Heredia and Falvey, Rod and Milner, Chris, Skill Content Tests of Endowment Models of Inter-And Intra-Industry Trade: Evidence for Some High Income Countries (2006). Available at SSRN: https://ssrn.com/abstract=920826 or http://dx.doi.org/10.2139/ssrn.920826

Manuel Heredia Cabral (Contact Author)

University of Minho ( email )

Braga, 4700
Portugal

Rod Falvey

Bond University - Department of Economics ( email )

Bond University - Department of Economics
Gold Coast, Queensland 4229
Australia

Chris Milner

University of Nottingham - School of Economics ( email )

University Park
Nottingham, NG7 2RD
United Kingdom

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