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Country size and comparative advantage: An empirical study

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Abstract

Country Size and Comparative Advantage: An Empirical Study.—The author formulates a simple model that captures two hypotheses: (i) that countries absolutely abundant in skilled labor will be net exporters in R&D-intensive industries and (ii) that countries with a large domestic market will be net exporters in scale-intensive industries. The hypotheses are empirically examined by pooling the data into one regression of industry-specific net export shares on country and industry characteristics. The results offer relatively strong support for hypothesis (i) and some support for hypothesis (ii). The conclusions are the same as when studying the trade of each OECD country individually. JEL no. F12, F14

Zusammenfassung

Ländergröße und komparativer Vorteil. Eine empirische Untersuchung.—Der Verfasser formuliert ein einfaches Modell, das zwei Hypothesen erfaßt: (i) daß Länder, die absolut über reichlich viele qualifizierte Arbeitskräfte verfügen. Nettoexporteure in F&E-intensiven Industrien sein werden und (ii) daß Länder mit einem großen heimischen Markt Nettoexporteure in skalenintensiven Industrien sein werden. Die Hypothesen werden empirisch geprüft mit Hilfe einer gepoolten Regression der Nettoexportanteile einzelner Wirtschaftszweige auf die theoretischen Einflußfaktoren: Charakteristika der Länder und der Industrien. Die Ergebnisse stützen ziemlich stark die Hypothese (i) und in geringerem Umfang die Hypothese (ii). Die Schlußfolgerungen stimmen mit den Ergebnissen von Berechnungen überein, in denen der Handel eines jeden OECD-Landes einzeln eingeht.

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Authors
  1. Johan Torstensson
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Additional information

Remark: An earlier version of this paper benefitted from helpful comments from participants at the CEPR Workshop on “New Developments in the Theory of Location” in London, November, 1995, and at the Royal Economic Society (RES) 1996 Conference in Swansea, April 1996. The present version has been presented at the EEA 1997 Conference and ESEM 1997 Meeting in Toulouse, August 1997. I would also like to thank seminar participants at Lund University, The Trade Union Institute for Economic Research (FIEF), Stockholm, and CREDIT, University of Nottingham, for their valuable comments. Financial support from the Swedish Council for Research in the Humanities and Social Sciences (HSFR), the Jan Wallander Foundation (Handelsbankens forskningsstiftelser), and the Nordic Economic Research Council is also gratefully acknowledged.

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Torstensson, J. Country size and comparative advantage: An empirical study. Weltwirtschaftliches Archiv 134, 590–611 (1998). https://doi.org/10.1007/BF02773289

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