International Trade in Manufactured Products: A Ricardo-Heckscher-Ohlin Explanation with Monopolistic Competition

March 1, 2001

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

A large data set on trade in manufactured products is used to evaluate the performance of a model that combines both the Ricardian and Heckscher-Ohlin effects and incorporates monopolistic competition. The paper estimates a relation implied by the model to explain relative sectoral exports of major countries to a number of important markets, using 1970-90 data for nine manufacturing sectors. The relation fits the data well and variables suggested by both traditional and new trade models play an important role in explaining relative exports.

Subject: Competition, Exports, Financial markets, International trade, Production, Productivity, Total factor productivity, Trade barriers

Keywords: Competition, composite-factor cost ratio, East Asia, Eastern Europe, export relation, Exports, least squares, monopolistic competition, Productivity, productivity variable, Ricardian and Heckscher-Ohlin models, Ricardian model, TFP ratio, TFP relations, Total factor productivity, Trade barriers, Western Europe, WP

Pages:
27
Volume:
2001
DOI:
https://doi.org/10.5089/9781451846102.001
Issue:
041
Series:
Working Paper No. 2001/041
Stock No:
WPIEA0412001
ISBN:
9781451846102
ISSN:
1018-5941

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