The Location of Comparative Advantages on the Basis of Fundamentals Only

Thijs ten Raa and Pierre Mohnen

Chapter 23 in Input–Output Economics: Theory and Applications:Featuring Asian Economies, 2009, pp 425-446 from World Scientific Publishing Co. Pte. Ltd.

Abstract: AbstractWe propose a new way to locate the comparative advantages of two economies linked by international trade. We construct a competitive benchmark based only on the fundamentals of the two economies: endowments, preferences and technologies. The direction of trade is endogenously determined by a linear program with an input–output core. The factor contents of that trade are compared with factor endowments to test the Heckscher–Ohlin model in the presence of different technologies and preferences. We can also evaluate the gains of free bilateral trade. The model is applied to a customs union between Europe and Canada. The Heckscher–Ohlin factor abundance specialization hypothesis is supported by the data.

Keywords: Input–Output Analysis; National Accounts; Productivity; Performance; Canadian Economy; Chinese Economy; Indian Economy; Asian Economics (search for similar items in EconPapers)
Date: 2009
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.worldscientific.com/doi/pdf/10.1142/9789812833679_0023 (application/pdf)
https://www.worldscientific.com/doi/abs/10.1142/9789812833679_0023 (text/html)
Ebook Access is available upon purchase.

Related works:
Journal Article: The Location of Comparative Advantages on the Basis of Fundamentals Only (2001)
Working Paper: The Location of Comparative Advantages on the Basis of Fundamentals Only (1997)
Working Paper: The location of comparative advantages on the basis of fundamentals only (1996)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wsi:wschap:9789812833679_0023

Ordering information: This item can be ordered from

Access Statistics for this chapter

More chapters in World Scientific Book Chapters from World Scientific Publishing Co. Pte. Ltd.
Bibliographic data for series maintained by Tai Tone Lim ().