Can factor proportions explain vertical intra-industry trade?

Torstensson, Johan

doi:10.1080/135048596356410

Cited by 17 publications

(8 citation statements)

References 5 publications

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“…14 Torstensson (1996) reports similar results using Swedish imports and more aggregated product categories.…”

Section: Introductionsupporting

confidence: 66%

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The Determinants of Quality Specialization

Dingel

2014

WTO Working Papers

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A growing literature suggests that high-income countries export high-quality goods.Two hypotheses may explain such specialization, with different implications for welfare, inequality, and trade policy. Fajgelbaum, Grossman, and Helpman (JPE 2011) formalize the Linder (1961) conjecture that home demand determines the pattern of specialization and therefore predict that high-income locations export high-quality products.The factor-proportions model also predicts that skill-abundant, high-income locations export skill-intensive, high-quality products (Schott, QJE 2004). Prior empirical evidence does not separate these explanations. I develop a model that nests both hypotheses and employ microdata on US manufacturing plants' shipments and factor inputs to quantify the two mechanisms' roles in quality specialization across US cities.Home-market demand explains at least as much of the relationship between income and quality as differences in factor usage. * I am grateful to

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“…14 Torstensson (1996) reports similar results using Swedish imports and more aggregated product categories.…”

Section: Introductionsupporting

confidence: 66%

“…52 Using very aggregate data, Torstensson (1996) obtains a negative partial correlation between prices and capital per worker when distinguishing between human and physical capital. Notes: Manufacturing establishments in the CFS and CMF.…”

Section: The Factor-abundance Hypothesismentioning

confidence: 99%

The Determinants of Quality Specialization

Dingel

2014

WTO Working Papers

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“…The data were obtained from the UN International Trade Data. Following Torstensson (1996) in classifying IIT data; the IIT data of the present study are classified according to the International Standard Trade Classification (SITC) Revision 3 for all product groups in SITC 5-8. Industry is defined at 3-digit SITC and products are defined at 5-digit SITC.…”

Section: Methodsmentioning

confidence: 99%

Bilateral intra-industry trade flows and intellectual property rights protection: first empirical evidence

Al-Mawali

2005

Applied Economics Letters

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This study provides the first empirical evidence on the effects of intellectual property rights (IPRs) protection on bilateral intra-industry trade (IIT) flows. The empirical investigation is based on pooled South African data and takes advantage of the theoretical distinction between horizontal and vertical IIT. A gravity equation of international trade is estimated in the context of fixed and random effects models. The principal findings suggest that IPRs and imitation abilities separately are not important factors in determining IIT flows. However, the interaction between them is important.

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“…The theoretical preferred measure of physical capital endowment is cumulated gross investment, but unfortunately it is not available for Hungary. Therefore we follow Torstensson (1996) in proxying physical capital endowment with energy consumption per capita (kwh per capita). Data is calculated from OECD database.…”

Section: Econometric Specification and Variablesmentioning

confidence: 99%

Vertically Differentiated Trade and Differences in Factor Endowment: The Case of Agri-Food Products between Hungary and the EU

Fertő

2005

J Agricultural Economics

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The paper investigates the relationship between factor endowment and vertical intraindustry trade (IIT)in agri‐food products between Hungary and the EU. Intra‐industry trade is separated into its horizontal and vertical components on the basis of differences in unit values. Three different approaches to measuring IIT are employed and these are then tested using panel regression models. Results show vertical type trade is predominant in total IIT for agri‐food products. In order to achieve more general results, we consider different types of productive factors: land, human and physical capital. Using Flam and Helpman type vertically differentiated trade models, we find a positive relationship between factor endowment and vertical IIT. More importantly, using a measure of IIT that reflects the level of trade produces better regression results than those based on the degree or share of IIT.

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Can factor proportions explain vertical intra-industry trade?

Cited by 17 publications

References 5 publications

The Determinants of Quality Specialization

The Determinants of Quality Specialization

Bilateral intra-industry trade flows and intellectual property rights protection: first empirical evidence

Vertically Differentiated Trade and Differences in Factor Endowment: The Case of Agri-Food Products between Hungary and the EU

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