Factor price equalization in the UK?

Andrew Bernard, Stephen Redding, Peter Schott and Helen Simpson

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

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)
Pages: 46 pages
Date: 2002-09
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

Downloads: (external link)
http://eprints.lse.ac.uk/3704/ Open access version. (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:ehl:lserod:3704

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