Research output: Contribution to Journal/Magazine › Journal article › peer-review
Research output: Contribution to Journal/Magazine › Journal article › peer-review
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TY - JOUR
T1 - Relative endowments and the volume of trade
AU - Soo, K T
PY - 2009
Y1 - 2009
N2 - This paper provides evidence that the volume of trade may increase as countries’ relative endowments become more similar. A model is developed that can explain this phenomenon. The model is a four-good version of the Davis (1995) Heckscher-Ohlin-Ricardo model of international trade based on technological and factor endowment differences across countries. In the model, trade volumes may increase with greater similarity in relative endowments, because productivity differences across countries mean that countries’ production becomes increasingly specialised the more similar are their relative endowments.
AB - This paper provides evidence that the volume of trade may increase as countries’ relative endowments become more similar. A model is developed that can explain this phenomenon. The model is a four-good version of the Davis (1995) Heckscher-Ohlin-Ricardo model of international trade based on technological and factor endowment differences across countries. In the model, trade volumes may increase with greater similarity in relative endowments, because productivity differences across countries mean that countries’ production becomes increasingly specialised the more similar are their relative endowments.
KW - international trade
KW - trade volume
KW - integrated equilibrium
M3 - Journal article
VL - 24
SP - 744
EP - 764
JO - Journal of Economic Integration
JF - Journal of Economic Integration
SN - 1225-651X
IS - 4
ER -