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Development-related biases in factor productivities and the HOV model of trade

Keith Maskus () and Shuichiro Nishioka ()

Canadian Journal of Economics, 2009, vol. 42, issue 2, 519-553

Abstract: tried to resuscitate HOV by introducing a simple Hicks-neutral (HN) factor-productivity adjustment. In this paper, we re-examine this question by estimating factor-specific productivities from the individual technology data of multiple developed and developing countries. We find evidence of factor-augmenting technological differences. Further, the ratios of factor productivities are strongly correlated with corresponding factor endowments. This systematic bias implies that the ability of HOV to explain North-South factor trade depends on both relative factor abundance and factor-augmenting productivity gaps.

JEL-codes: F10 F11 (search for similar items in EconPapers)
Date: 2009
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Journal Article: Development‐related biases in factor productivities and the HOV model of trade (2009) Downloads
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