Relative Endowments and the Volume of Trade

Kwok Tong Soo ()

Journal of Economic Integration, 2009, vol. 24, 744-764

Abstract: This paper provides evidence that the volume of trade may increase as countries’ relative endowments become more similar. A model is developed that can explain this phenomenon. The model is a four-good version of the Davis (1995) Heckscher-Ohlin-Ricardo model of international trade based on technological and factor endowment differences across countries. In the model, trade volumes may increase with greater similarity in relative endowments, because productivity differences across countries mean that countries’ production becomes increasingly specialised the more similar are their relative endowments.

Keywords: international trade; trade volume; integrated equilibrium (search for similar items in EconPapers)
JEL-codes: F11 (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:ris:integr:0492

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