Specific Factors, Comparative Advantage and International Investment

Amano, Akihiro

doi:10.2307/2553716

Cited by 41 publications

(14 citation statements)

References 13 publications

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“…Although capital is not sector specific in our model, its allocation across sectors is pinned down by the parameters governing the tightness of the financial constraint. Amano (1977), Brecher and Findlay (1983), Jones (1989), and Neary (1995) study capital mobility within variants of the specific-factors model, but the conclusions generally depend on the assumed pattern of specialization and factor mobility.…”

Section: Introductionmentioning

confidence: 99%

Trade and Capital Flows: A Financial Frictions Perspective

Caballero

Antràs

2009

Journal of Political Economy

193

118

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The classical Heckscher-Ohlin-Mundell paradigm states that trade and capital mobility are substitutes in the sense that trade integration reduces the incentives for capital to flow to capital-scarce countries. In this paper we show that in a world with heterogeneous financial development, a very different conclusion emerges. In particular, in less financially developed economies (South), trade and capital mobility are complements in the sense that trade integration increases the return to capital and thus the incentives for capital to flow to South. This interaction implies that deepening trade integration in South raises net capital inflows (or reduces net capital outflows). It also implies that, at the global level, protectionism may backfire if the goal is to rebalance capital flows. (c) 2009 by The University of Chicago. All rights reserved..

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Section: Introductionmentioning

confidence: 99%

Trade and Capital Flows: A Financial Frictions Perspective

Caballero

Antràs

2009

Journal of Political Economy

193

118

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“…Zhao (1998) gives an analysis of this sort in a general equilibrium setting. 9 This is suggested by Caves (1971) and implemented by, among others, Amano (1977), Batra and Ramachandran (1980), Burgess (1978), Falvey (1979) and . Jones and Dei (1983) provide a useful graphical framework.…”

Section: The`new' Trade Modelsmentioning

confidence: 92%

Integration, Foreign Direct Investment and Labour Markets: Microeconomic Perspectives

Gaston

Nelson

2002

The Manchester School

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Foreign direct investment (FDI) has grown far more rapidly than trade during the last two decades. As with the other prominent features of globalization, FDI is controversial. The impact of FDI on labour markets has been of growing concern, in particular for source countries. The deterioration of labour market conditions for unskilled workers in many OECD countries during the 1980s and 1990s was a primary catalyst for the concern. With regard to its impact on labour markets, FDI may have e¡ects that, at least in the short and medium run, may well dwarf the e¡ects of trade and immigration. In this paper, we review the economic theories and econometric evidence which purport to explain various aspects of the impact of FDI on labour markets. The emphasis is on two partial equilibrium models which, respectively, focus on the location decisions of multinationals and the impact of global ¢rms on collective bargaining outcomes.

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“…The extreme behaviour of the specific factors model with labour immigration is among the properties originally identified by Caves (1971), who used the formulation of Jones (1971) to explore investment behaviour. His work was later formalised by Amano (1977) and Falvey (1979). 9 The key point is that, for both the HOS and specific factors models, when labour and capital are both sectorally and internationally mobile, any non‐zero tariff is prohibitive.…”

Section: A Specific Factors Interpretation Of the Brigden Thesismentioning

confidence: 99%

Beyond Brigden: Australia's Inter‐War Manufacturing Tariffs, Real Wages and Economic Size*

Tyers

Coleman

2008

Economic Record

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Pre‐depression Australia maintained a protectionist regime directed at expanding the economy and accommodating immigration. The 1929 Brigden Report recognised that industrial protection would benefit workers and that it might also foster expansion. Although Brigden's wage thesis mirrors the subsequent Heckscher–Ohlin–Samuelson and specific factors models, it has more advanced elements than either. We demonstrate the comparative failings of the latter models and show that the Brigden thesis requires a model with mobile capital, differentiated products, a non‐traded sector and a specific factor. This model suggests that protection might indeed have promoted immigration, capital inflow and overall economic expansion in Australia.

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Specific Factors, Comparative Advantage and International Investment

Cited by 41 publications

References 13 publications

Trade and Capital Flows: A Financial Frictions Perspective

Trade and Capital Flows: A Financial Frictions Perspective

Integration, Foreign Direct Investment and Labour Markets: Microeconomic Perspectives

Beyond Brigden: Australia's Inter‐War Manufacturing Tariffs, Real Wages and Economic Size*

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