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Factor Price Equalization in the UK?

Andrew Bernard (), Stephen Redding and Peter Schott ()

No 21, Royal Economic Society Annual Conference 2003 from Royal Economic Society

Abstract: This paper develops a general test of factor price equalization that is robust to unobserved regional productivity differences, unobserved region-industry factor quality differences and variation in production technology across industries. We test relative factor price equalization across regions of the UK. Although the UK is small and densely-populated, we find evidence of statistically significant and economically important departures from relative factor price equalization. Our estimates suggest three distinct relative factor price areas with a clear spatial structure. We explore explanations for these findings, including multiple cones of diversification, region-industry technology differences, agglomeration and increasing returns to scale.

Keywords: relative factor prices; diversification cones; technology; economic geography (search for similar items in EconPapers)
JEL-codes: F11 F14 C14 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-geo
Date: 2003-06-04
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http://repec.org/res2003/Bernard.pdf full text

Related works:
Working Paper: Factor Price Equalization in the UK? (2002) Downloads
Working Paper: Factor Price Equalization in the UK? (2002) Downloads
Working Paper: Factor price equalization in the UK? (2002) Downloads
Working Paper: Factor price equalisation in the UK (2002) Downloads
Working Paper: Factor Price Equalization in the UK? (2002) Downloads
Working Paper: Factor Price Equalization in the UK? (2002) Downloads
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