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
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)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:inecon:v:87:y:2012:i:1:p:98-104
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