Country Size and Comparative Advantage: An Empirical Study

Johan Torstensson

No 1554, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We formulate a simple model that captures two recent hypotheses: (i) that countries with an abundant absolute endowment of skilled labour will be net exporters in R&D-intensive industries; and (ii) that countries with a large domestic market will be net exporters in scale-intensive industries. The hypotheses are empirically tested by studying the trade of each and every OECD country individually. Thereafter, we pool the data into one regression by introducing, simultaneously, country and industry characteristics. The results offer relatively strong support for hypothesis (i) and some support for hypothesis (ii).

Keywords: Comparative Advantage; Country Size; Economic Geography; Trade (search for similar items in EconPapers)
JEL-codes: F12 F14 (search for similar items in EconPapers)
Date: 1997-01
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Citations: View citations in EconPapers (5)

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