Factor or Industry Cleavages in Trade Policy? An Empirical Analysis of the Stolper–Samuelson Theorem

Eugene Beaulieu ()

Economics and Politics, 2002, vol. 14, issue 2, 99-131

Abstract: If factors of production are mobile between industries, the Stolper–Samuelson Theorem predicts that cleavages over trade policy will form along factor lines. Conversely, if factors are immobile, cleavages will form along industry lines. These two hypotheses are empirically examined using micro‐data from a survey conducted during the 1988 Canadian federal election—a de facto referendum on free trade. Factors of production are found to be important determinants of preferences on trade policy. However, the industry of employment also helps determine preferences on trade policy. These results are consistent with partial factor mobility.

Date: 2002
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