Directed Technical Change and International Trade

Leonard Dudley and Johannes Moenius

Cahiers de recherche from Universite de Montreal, Departement de sciences economiques

Abstract: Recent changes in comparative advantage in the largest OECD economies differ significantly from the predictions of Heckscher-Ohlin-Vanek theory. Japan's rising share of OECD machinery exports and the improvement in the comparative advantage of the USA and Germany in heavy industry were accompanied by growing scarcities of the factors used intensively in the favored sector of each country. Here we examine Acemoglu's (1998, 2002) hypothesis that technical change may be directed toward raising the marginal productivity of abundant factors. Testing this hypothesis with 1970-1992 export data from 14 OECD countries, we find evidence that international comparative advantage was reshaped by innovation biased toward the abundant factors in the largest economies.

Keywords: international trade; comrative advantage; induced innovation; technological change; dynamic (search for similar items in EconPapers)
JEL-codes: F1 O3 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2003
New Economics Papers: this item is included in nep-dev and nep-ino
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Persistent link: https://EconPapers.repec.org/RePEc:mtl:montde:2003-18

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