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Factor Endowments (factor + endowment)

Distribution by Scientific Domains

Business, Economics, Finance and Accounting	66%
Humanities and Social Sciences	33%

Selected Abstracts

Factor Endowments and the Private Provision of Public Goods

BULLETIN OF ECONOMIC RESEARCH, Issue 2 2004
Simon Vicary
H4 Abstract The paper examines the consequences of increasing the size of the community in the standard model of the private provision of public goods when costs are variable. In contrast to an economy with fixed costs, the provision of the public good can fall with a larger community, and an increased provision of the public good is neither a necessary nor a sufficient condition for individual utility to rise. The paper also contributes to the literature on immiserizing growth in that it shows that capital accumulation can possibly result in lower utility for all individuals. [source]

From Licence Raj to Market Forces: The Determinants of Industrial Structure in India after Reform

ECONOMICA, Issue 298 2008
KWOK TONG SOO
This paper explores the relationship between factor endowments, technology and industrial structure, using a panel data-set of Indian industries across states, industries and time. Factor endowments and technology are found to be significantly related to industry shares, and this is robust to controlling for the slow adjustment of industrial structure. I also consider the impact of the liberalization of the Indian economy beginning in 1985 and 1991 on the relationship between these variables. While industrial structure is always positively related to technological advantage, factor endowments play an increasingly significant role after liberalization. [source]

Classification Analysis of World Economic Regions

GEOGRAPHICAL ANALYSIS, Issue 4 2001
Raymond J. Dezzani
Economic classifications of countries are of continuing utility for comparative and analytic purposes. However, traditional methods of arriving at classifications are often ad hoc, subjective, and imprecise, not permitting the assignments to be used for closer analysis. Discriminant analysis is used in this paper to isolate a time-specific set of economic factors delimiting economic state categories that correspond to core-periphery states. The core-periphery framework is shown to be a special case of a hierarchical market scheme. The purposes of this work are (1) to create a theoretically grounded, empirically derived classification over several time periods to permit dynamic comparisons to be made and provide an explanation of change in the global economy, and (2) to provide feedback information from the classification to supply the necessary rigor and quantitative insight to the world-systems theoretical framework. Results of the analysis suggest that different economic variables provide varying levels of explanation at different times. In particular, variables representing factor endowment provide a greater measure of explanation early in the sequence (for example, 1960) while trade and investment measures are of greater importance in the latter part of the study sequence (for example, 1990). OPEC countries significantly bifurcate the world-economy classification in 1970 and exhibit separate class characteristics. Even within the short time period, a number of countries are shown to transit among the classes. The model is also able to capture the dependence structure implicit in the world-systems framework. [source]

DUALITY WITH SECTOR-SPECIFIC EXTERNALITIES UNDER SOCIAL CONSTANT RETURNS,

THE JAPANESE ECONOMIC REVIEW, Issue 4 2006
KAZUO NISHIMURA
We develop dual approaches to quantity and price relationships of production in a general multisectoral model with sector-specific externalities. The production of each good exhibits socially constant returns to scale but privately decreasing returns. We find that the Stolper-Samuelson theorem holds for factor intensity ranking from the social perspective and that the Rybczynski theorem holds for factor intensity ranking from the private perspective. The price-output dual fails to hold in general. Moreover, we re-establish the Heckscher-Ohlin theorem in the two-sector case, as well as the factor endowment,factor price and price-output comparative statics in the high-dimension case under proper conditions. [source]

A CHINESE PERSPECTIVE ON THE CHINA-AUSTRALIA FREE TRADE AGREEMENT AND POLICY SUGGESTIONS

ECONOMIC PAPERS: A JOURNAL OF APPLIED ECONOMICS AND POLICY, Issue 1 2008
DAWEI CHENG
This article provides an analysis of the potential economic effects of the China,Australia free trade agreement, and provides a set of policy recommendations regarding such an agreement. The article begins with a review of China,Australia trade relations, showing the widening gap in the importance of one country relative to the other. Next, the article examines the competitive advantages of China and Australia in trade by way of local revealed comparative advantage (RCA) and finds that trade between China and Australia is predicated on differences in their factor endowments. The study then investigates the main problems in the negotiations for the China,Australia Free Trade Agreement and concludes with a set of policy suggestions. [source]

COMPARATIVE ADVANTAGE AND AUSTRALIA-CHINA BILATERAL TRADE

ECONOMIC PAPERS: A JOURNAL OF APPLIED ECONOMICS AND POLICY, Issue 1 2008
YU SHENG
Bilateral trade between Australia and China has expanded in recent years. This paper examines the determinants of bilateral trade at the two-digit commodity level using a modified gravity model with explicitly specified revealed comparative advantage incorporated. This methodology allows us to explore how the relative comparative advantage of Australia and China to the world, mirroring their individual pattern of factor endowments, affects the pattern of trade between the two countries and to identify whether there exists a kind of complimentarity international specialisation between the two countries against the backdrop of each country's booming trade with the rest of the world. Key commodities such as agricultural products, iron ore, petroleum, textiles and clothing, and machinery goods are considered to estimate net welfare in terms of added value deriving from bilateral trade. The findings have policy implications for forging future trade and economic cooperation between Australia and China. [source]

From Licence Raj to Market Forces: The Determinants of Industrial Structure in India after Reform

Bilateral Import Protection, Free Trade Agreements, and Other Factors Influencing Trade Flows in Agriculture and Clothing

JOURNAL OF AGRICULTURAL ECONOMICS, Issue 2 2009
Thomas L. Vollrath
F1; F13; F14 Abstract Many factors shape the global network of bilateral trade including fundamental forces of supply and demand factors and government policies. This study uses the generalised gravity framework to distinguish among the different drivers that either deter or aid partner trade in land-intensive agriculture and labour-intensive clothing. The dataset used in the analysis includes bilateral trade among 70 countries in 1995, 2000 and 2005. Collectively, the 70 countries account for 85% of the world's trade in agriculture and 96% of its GDP. Empirical results lend support to the Heckscher,Ohlin explanation of trade, namely that relative factor endowments motivate cross-border trade. Results also show that tariffs are not always binding and bilateral free-trade agreements more often divert rather than create trade. [source]

Comparative Advantage in Demand: Experimental Evidence of Preferences for Genetically Modified Food in the United States and European Union

JOURNAL OF AGRICULTURAL ECONOMICS, Issue 1 2006
Jayson L. Lusk
Q130; Q170; Q180; C190 Abstract The United States (US) exports more than US$6 billion in agricultural commodities to the European Union(EU) each year, but one issue carries the potential to diminish this trade: use of biotechnology in food production. The EU has adopted more stringent policies towards biotechnology than the US. Understanding differences in European and American policies towards genetically modified (GM) foods requires a greater understanding of consumers' attitudes and preferences. This paper reports results from the first large-scale, cross-Atlantic study to analyse consumer demand for genetically modified food in a non-hypothetical market environment. We strongly reject the frequent if convenient assumption in trade theory that consumer preferences are identical across countries: the median level of compensation demanded by English and French consumers to consume a GM food is found to be more than twice that in any of the US locations. Results have important implications for trade theory, which typically focuses on differences in specialization, comparative advantage and factor endowments across countries, and for on-going trade disputes at the World Trade Organization. [source]

THE EFFECTS OF TRADE WITH DEVELOPING COUNTRIES ON THE REGIONAL DEMAND FOR SKILL IN THE U.S.: EVIDENCE FROM COUNTY DATA,

JOURNAL OF REGIONAL SCIENCE, Issue 3 2009
Ivan T. Kandilov
ABSTRACT Using county-level data from the 1980s and 1990s and a county-level trade measure that incorporates the county's industrial mix and patterns of international trade across industries, I provide new evidence that trade with developing countries raises the demand for skill and the skill premium in the U.S. Consistent with Heckscher,Ohlin, I find that trade driven by differences in factor endowments has an economically significant impact on local labor markets. The evidence suggests that when trade with developing countries rises, counties with higher skill endowment and greater employment in industries with larger trade shares experience greater relative demand for high-skilled labor. [source]

CONSIDERING THE SOURCE: DOES THE COUNTRY OF ORIGIN OF FDI MATTER TO ECONOMIC GROWTH?,

JOURNAL OF REGIONAL SCIENCE, Issue 2 2008
Timothy C. Ford
ABSTRACT It has long been surmised that firms controlled by different countries may have unequal effects on the host economies in which they locate. By looking at the seven major source countries of foreign direct investment (FDI) in the United States, we provide empirical evidence that the state growth effects of FDI differ by source country. We attribute these differential growth effects to the relative differences in factor endowments between the source country and the state. The implication of this result is that technology transfer, believed to be the engine of economic growth, becomes more costly the more dissimilar the endowments. [source]

Can Comparative Advantage Explain the Growth of us Trade?,

THE ECONOMIC JOURNAL, Issue 520 2007
Alejandro Cuñat
We present a dynamic comparative advantage model in which moderate reductions in import tariffs can generate sizable increases in trade volumes over time. A fall in tariffs has two effects. First, for given factor endowments, it raises the degree of specialisation, leading to a larger volume of trade in the short run. Second, it raises the factor price of each country's abundant factor, leading to diverging paths of relative factor endowments and a rising degree of specialisation. A simulation exercise shows that a fall in tariffs produces a disproportional increase in the trade share of output as in the data. [source]

MONOPOLISTIC COMPETITION WITH EFFICIENCY GAPS AND A HECKSCHER-OHLIN TRADE PATTERN,

THE JAPANESE ECONOMIC REVIEW, Issue 3 2006
TORU KIKUCHI
We develop a two-factor, three-sector model of international trade in which the monopolistically competitive firms are characterized by different fixed production costs. We show that, depending on the pattern of the international distribution of factor endowments, the trade pattern is determined not only by relative factor endowments as suggested by Heckscher and Ohlin, but also by absolute factor endowments via a mechanism of competitive selection in the monopolistically competitive sector. [source]