Factor Endowments, Technology, Capital Mobility and the Sources of Comparative Advantage in Manufacturing

2016 ◽  
Author(s):  
Shushanik Hakobyan ◽  
Daniel Lederman
Keyword(s):  
Comparative Advantage ◽  
Capital Mobility ◽  
Factor Endowments

scholarly journals La théorie de Heckscher-Ohlin et la localisation des industries manufacturières canadiennes : présentation de quelques résultats empiriques

2009 ◽  
Vol 56 (1) ◽  
pp. 80-96
Author(s):  
Michel Boucher
Keyword(s):  
Comparative Advantage ◽  
Strong Evidence ◽  
Manufacturing Industries ◽  
Standard Industrial Classification ◽  
Production Technique ◽  
Factor Endowments ◽  
Intensive Production ◽  
Capital Intensive ◽  
Relative Factor ◽  
Statistical Results

Abstract This paper applies the Heckscher-Ohlin hypothesis to the location of regional manufacturing industries in Canada. The empirical results demonstrate with strong evidence the first hypothesis that Quebec and Ontario enjoy different locational characteristics because of their relative factor endowments. More precisely, firms operating in Quebec adopt labor-intensive production process relatively to those located in Ontario which choose a capital-intensive production technique. The statistical results of the second hypothesis confirm sufficiently that both provinces increased their specialization in industries when they have a relative increasing comparative advantage respectively labor-intensive industries for Quebec and capital-intensive industries for Ontario. Finally, those hypotheses are confirmed not only for the twenty two-digit manufacturing industries of the Standard Industrial Classification (SIC), but also for thirty-one three-digit manufacturing industries.

Book Reviews

2013 ◽  
Vol 51 (2) ◽  
pp. 564-570
Keyword(s):  
Economic Development ◽  
Development Strategy ◽  
Comparative Advantage ◽  
English Language ◽  
Vice President ◽  
Chinese Economy ◽  
Socialist Revolution ◽  
State University ◽  
Financial Reforms ◽  
Factor Endowments

Belton M. Fleisher of Ohio State University, Central University of Finance and Economics, and IZA reviews, “Demystifying the Chinese Economy “ by Justin Yifu Lin. The Econlit abstract of this book begins: “Originally published in Chinese in 2009. Updated English-language edition explores China's economic development and transition over the past few centuries and considers the reforms necessary for China to complete the transition to a well-functioning market economy. Discusses opportunities and challenges in China's economic development; why the Scientific and Industrial Revolutions bypassed China; the great humiliation and the Socialist Revolution; the comparative advantage-defying, catching-up strategy and the traditional economic system; enterprise viability and factor endowments; the comparative-advantage-following development strategy; rural reform and the three rural issues; urban reform and the remaining issues; reforming the state-owned enterprises; the financial reforms; deflationary expansion and building a new socialist countryside; improving the market system and promoting fairness and efficiency for harmonious development; and reflections on neoclassical theories. Lin is Senior Vice President and Chief Economist of the World Bank.”

China’s Industrial Development Strategies and Policies

2021 ◽  
pp. 55-72
Author(s):  
Justin Yifu Lin ◽  
Jianjun Zhou
Keyword(s):  
Comparative Advantage ◽  
Industrial Development ◽  
Developed Countries ◽  
Chinese Government ◽  
Industrial Policies ◽  
Learning Capacity ◽  
Factor Endowments ◽  
Comparative Advantages ◽  
Indigenous Innovation ◽  
The Government

China has adopted a transition strategy and industrial policies pragmatically according to its economic reality since the reform and opening up started in 1979. The organic combination of an effective market with a facilitating state was the main reason for the success of China’s economy in the past four decades. In the process of China’s economic development, industrial policies have played a crucial role in both industrial upgrading and technological progress. Relying on the comparative advantage—following strategy, China has fully utilized its latecomer advantage. Chinese enterprises learn advanced technologies from developed countries when the opportunities exist and do indigenous innovation when needed. Pragmatism and learning capacity has been the most important endowments and comparative advantages of the Chinese government and enterprises. With learning capacity, the government and enterprises can pragmatically explore the comparative advantage of the existing factor endowments and convert latent comparative advantages into competitive advantages to promote continuous transformation, upgrading, and sustainable development.

scholarly journals China

2019 ◽  
pp. 149-172 ◽  
Author(s):  
Justin Yifu Lin ◽  
Jun Zhang
Keyword(s):  
Development Strategy ◽  
Comparative Advantage ◽  
Industrial Structure ◽  
Rapid Development ◽  
Factor Endowments ◽  
Catching Up ◽  
Rapid Economic Growth ◽  
Economic Zones

China is one of a handful of economies that has successfully achieved rapid long-term growth since the Second World War and is one of the fastest technological learners among latecomers. Its technological progress and economic success is attributable to the grand transformation of its development strategy since 1978. With special economic zones and encouraging inflow of foreign direct investment, China created conditions to help comparative advantage-following industries to grow and integrate with the global supply chain, paving the way for institutional reform and turning a relatively closed economy into a global manufacturing powerhouse. The catching-up strategy proposed by development economics to latecomers fails to take into account the evolutionary nature of industrial structure and downplays the role of initial factor endowments. The New Structural Economics advocated by Justin Yifu Lin underscores the importance of comparative advantage and learning, linking endowment structure and rapid economic growth. Late latecomers following the NSE approach and accumulating physical and human capital through learning are most likely to achieve rapid development and to upgrade from imitation to innovation.

scholarly journals Why Isn't the Whole of Spain Industrialized? New Economic Geography and Early Industrialization, 1797–1910

2003 ◽  
Vol 63 (4) ◽  
pp. 995-1022 ◽  
Author(s):  
JOAN R. ROSÉS
Keyword(s):  
Economic Geography ◽  
Comparative Advantage ◽  
Regional Differences ◽  
Industrial Development ◽  
New Economic Geography ◽  
Home Market ◽  
Market Effects ◽  
Factor Endowments ◽  
Domestic Trade ◽  
Home Market Effects

Spain provides an opportunity to study the causes of regional differences in industrial development over the nineteenth century. As transportation costs decreased and barriers to domestic trade were eliminated, Spanish manufacturing became increasingly concentrated in a few regions. This article combines Heckscher-Ohlin and economic-geography frameworks and finds that comparative-advantage and increasing-return effects were economically very significant and practically explained all differences in industrialization levels across regions. The deficits of some regions in terms of industrialization appear to have been largely attributable to their factor endowments and the absence of home-market effects for modern industries.

Diversity and Trade

2000 ◽  
Vol 90 (5) ◽  
pp. 1255-1275 ◽  
Author(s):  
Gene M Grossman ◽  
Giovanni Maggi
Keyword(s):  
Income Distribution ◽  
Comparative Advantage ◽  
Trade Pattern ◽  
Homogeneous Population ◽  
Diverse Workforce ◽  
Factor Endowments ◽  
Competitive Model ◽  
Good For ◽  
Imperfect Observability ◽  
Individual Success

We develop a competitive model of trade between countries with similar aggregate factor endowments. The trade pattern reflects differences in the distribution of talent across the labor forces of the two countries. The country with a relatively homogeneous population exports the good produced by a technology with complementarities between tasks. The country with a more diverse workforce exports the good for which individual success is more important. Imperfect observability of talent strengthens the forces of comparative advantage. Finally, we examine the effects of trade on income distribution and the composition of firms in each industry. (JEL F11, D51)

scholarly journals CHALLENGES IN PROMOTING ECONOMIC GROWTH OF GHANA THROUGH VALUE ADDED EXPORTS

2018 ◽  
Vol 6 ◽  
pp. 193-199
Author(s):  
Isaac Ibrahim ◽  
Haiyun Liu
Keyword(s):  
Economic Growth ◽  
Comparative Advantage ◽  
Raw Materials ◽  
Value Added ◽  
Secondary Data ◽  
Empirical Method ◽  
Value Addition ◽  
Middle Income ◽  
Factor Endowments ◽  
The World

Ghana is endowed with natural resources such as gold, cocoa, crude oil, and other factor endowments that gives the country a comparative advantage in trade. Ghana, a low-middle income country, is the second largest producer of gold in Africa and 11th in the world, as well as the second largest exporter of cocoa in the world. With all the factor endowments and export potential however, the country exports basically raw materials with little value addition and therefore is deprived of the full benefits accruing to trade and exports.This paper employs an empirical method and applies the Ricardian Model of Comparative Advantage using available secondary data to explore the importance of exports to the economic growth of the country and certain challenges of value addition. The findings show that exports promote economic growth as well as that value addition can be beneficial in earnings and needs government attention in following the recommendations therein.  

scholarly journals Increasing Returns and All That: A View from Trade

2002 ◽  
Vol 92 (1) ◽  
pp. 93-119 ◽  
Author(s):  
Werner Antweiler ◽  
Daniel Trefler
Keyword(s):  
International Trade ◽  
Comparative Advantage ◽  
Returns To Scale ◽  
Scale Economies ◽  
Trade Flows ◽  
Increasing Returns ◽  
Large Database ◽  
Trade Data ◽  
Increasing Returns To Scale ◽  
Factor Endowments

Do scale economies help to explain international trade flows? Using a large database on output, trade flows, and factor endowments, we find that allowing for the presence of increasing returns to scale in production significantly increases our ability to predict international trade flows. In particular, using trade data, we find that a third of all goods-producing industries are characterized by increasing returns to scale. Thus, scale economies are a quantifiable and important source of comparative advantage.

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