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Comparative Advantages, Transaction Costs and Factor Content of Agricultural Trade: Empirical Evidence from the CEE

Pavel Ciaian, d'Artis Kancs and Jan Pokrivcak ()

No EERI_RP_2008_03, EERI Research Paper Series from Economics and Econometrics Research Institute (EERI), Brussels

Abstract: The present study examines factor content of the CEE transition country agricultural trade. We examine the relative country abundance for labour, capital and land, and test the Heckscher-Ohlin-Vanek (HOV) hypothesis. Our empirical findings suggest that the factor content of agricultural exports and imports is rather similar in CEE and most of the agricultural trade flows do not satisfy the HOV prediction. In order to explain the general lack of agricultural specialisation and the observed paradox in the CEE's agricultural trade, we examine the role of transaction costs and market imperfections. We find that transaction costs and market imperfections distort farm specialisation and hence factor content of agricultural trade.

Keywords: Factor Content; Agricultural Trade; Comparative Advantages; Transaction Costs (search for similar items in EconPapers)
JEL-codes: F12 F14 D23 Q12 Q17 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-agr, nep-int and nep-tra
Date: 2008-02
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Related works:
Journal Article: Comparative Advantages, Transaction Costs and Factor Content in Agricultural Trade: Empirical Evidence from the CEE - Vantaggi comparati, costi di transazione e contenuto dei fattori nel commercio agricolo: evidenze empiriche dai paesi dell’Europa centro-orientale (2011) Downloads
Working Paper: Comparative Advantages, Transaction Costs and Factor Content in Agricultural Trade: Empirical Evidence from the CEE (2008) Downloads
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