Factor Price Equalization in the UK?

Andrew Bernard, Stephen Redding, Peter Schott and Helen Simpson

CEP Discussion Papers from Centre for Economic Performance, LSE

Abstract: This paper develops a general test of factor price equalization that is robust to unobserved regional productivity differences, unobserved region- industry factor quality differences and variation in production technology across industries. We test relative factor price equalization across regions of the UK. Although the UK is small and densely-populated, we find evidence of statistically significant and economically important departures from relative factor price equalization. Our estimates suggest three distinct relative factor price areas with a clear spatial structure. We explore explanations for these findings, including multiple cones of diversification, region-industry technology differences, agglomeration and increasing returns to scale.

Keywords: Elative Factor Prices; Diversification Cones; Technology; Economic Geography (search for similar items in EconPapers)
JEL-codes: C14 F14 (search for similar items in EconPapers)
Date: 2002-09
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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https://cep.lse.ac.uk/pubs/download/DP0547.pdf (application/pdf)

Related works:
Working Paper: Factor Price Equalization in the UK? (2003)
Working Paper: Factor Price Equalization in the UK? (2002)
Working Paper: Factor price equalization in the UK? (2002)
Working Paper: Factor price equalisation in the UK (2002)
Working Paper: Factor Price Equalization in the UK? (2002)
Working Paper: Factor Price Equalization in the UK? (2002)
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Persistent link: https://EconPapers.repec.org/RePEc:cep:cepdps:dp0547

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