EconPapers    
Economics at your fingertips  
 

Factor content of bilateral trade: the role of firm heterogeneity and transaction costs

d'Artis Kancs and Pavel Ciaian

Agricultural Economics, 2010, vol. 41, issue 3-4, 305-317

Abstract: The article studies the determinants of the factor content in foreign trade in countries from Central and Eastern Europe (CEE). The theoretical model relaxes several important assumptions such as factor price equalization, firm heterogeneity, and introduces technological differences into the standard Heckscher-Ohlin model. Based on the agricultural production and trade data for the CEE, we examine empirically three hypotheses, which relate cross-country differences in technology, relative factor abundance and transaction costs and market imperfections to the factor content of trade. We find that the first two hypotheses are confirmed by the majority of the developed EU countries, but rejected by roughly one half of the CEE transition country pairs. Second, we find that when accounting for the transaction costs of farm (re)organization, both hypotheses are confirmed by the majority of the CEE country pairs. These findings provide indirect evidence of market imperfections, and particularly, of transaction costs of farm (re)organization in the CEE. Copyright (c) 2010 International Association of Agricultural Economists.

Date: 2010
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (8) Track citations by RSS feed

Downloads: (external link)
http://www.blackwell-synergy.com/doi/abs/10.1111/j.1574-0862.2010.00444.x link to full text (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Factor Content of Agricultural Trade: The Role of Firm Heterogeneity and Transaction Costs (2009) Downloads
Working Paper: Factor Content of Bilateral Trade: The Role of Firm Heterogeneity and Transaction Costs (2009) Downloads
Working Paper: Factor Content of Agricultural Trade (2008) Downloads
Working Paper: Factor Content of Agricultural Trade (2008) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:agecon:v:41:y:2010:i:3-4:p:305-317

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0169-5150

Access Statistics for this article

Agricultural Economics is currently edited by W.A. Masters and G.E. Shively

More articles in Agricultural Economics from International Association of Agricultural Economists Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().

 
Page updated 2018-11-17
Handle: RePEc:bla:agecon:v:41:y:2010:i:3-4:p:305-317