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International differences in production techniques: Implications for the factor content of trade

Shuichiro Nishioka ()

Journal of International Economics, 2012, vol. 87, issue 1, 98-104

Abstract: This paper examines how production techniques differ across countries, factors, and industries and considers its implications for previous empirical evidence on the Vanek prediction. I find that production techniques differ substantially across countries and factors, but differ much less across industries within a country. Davis and Weinstein (2001) argue that modeling cross-industry differences (multiple-cone specialization) improves the fit of the Vanek prediction; however, their test statistics are unchanged when one restricts techniques to be identical across industries within a country. Thus, the bulk of world factor content of trade does not arise from specialization.

Keywords: Heckscher–Ohlin; Specialization across industries; Production technique (search for similar items in EconPapers)
JEL-codes: F11 O11 (search for similar items in EconPapers)
Date: 2012
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DOI: 10.1016/j.jinteco.2011.11.010

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Journal of International Economics is currently edited by Gourinchas, Pierre-Olivier and Rodríguez-Clare, Andrés

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