Factor Content of Bilateral Trade: The Role of Firm Heterogeneity and Transaction Costs

d'Artis Kancs and Pavel Ciaian

No 331718, Conference papers from Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project

Abstract: In this paper we study the determinants of the factor content of the CEE agricultural trade. Examining empirically three hypothesis, which relate cross-country differences in technology, relative factor abundance and transaction costs and market imperfections to the factor content of trade we find that the first two hypotheses are confirmed by the majority of developed EU countries, but rejected by roughly one half of the CEE transition country pairs. Second, we find that when accounting for transaction costs of farm (re)organisation, both hypotheses are confirmed by the majority of the CEE country pairs. These findings provide empirical evidence of market imperfections, and particularly, of transaction costs of farm (re)organisation in the CEE.

Keywords: International Relations/Trade; Research and Development/Tech Change/Emerging Technologies (search for similar items in EconPapers)
Pages: 33
Date: 2008
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Related works:
Journal Article: Factor content of bilateral trade: the role of firm heterogeneity and transaction costs (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:pugtwp:331718

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