Specialization Patterns and the Factor Bias of Technology

Alejandro Cunat and Marco Maffezzoli ()

The B.E. Journal of Macroeconomics, 2007, vol. 7, issue 1, 27

Abstract: Development accounting exercises based on an aggregate production function find technology is biased in favor of a country's abundant production factors. We provide an explanation for this finding based on the Heckscher-Ohlin model. Countries trade and specialize in the industries that use intensively the production factors they are abundantly endowed with. For given factor endowment ratios, this implies smaller international differences in factor price ratios than under autarky. Thus, when measuring the factor bias of technology with the same aggregate production function for all countries, they appear to have an abundant-factor bias in their technologies.

Keywords: international trade; Heckscher-Ohlin; simulation; development accounting; skill bias (search for similar items in EconPapers)
Date: 2007
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Working Paper: Specialization Patterns and the Factor Bias of Technology (2007)
Working Paper: Specialization Patterns and the Factor Bias of Technology (2007)
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DOI: 10.2202/1935-1690.1574

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