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Lumpy countries, urbanization, and trade

Brakman, S. & van Marrewijk, C., Jan-2013, In : Journal of International Economics. 89, 1, p. 252-261 10 p.

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DOI

Lumpiness of production factors within a country might overturn the Heckscher-Ohlin (HO) model's predictions for the factor content of trade. Trade patterns, as predicted by this model, can both be magnified or reversed by uneven concentration of production factors within a country. Cities are the most characteristic manifestation of lumpiness of production factors and as a consequence different patterns of urbanization between countries might cause trade patterns to differ from the HO model's predictions on the basis of the overall availability of production factors. Using data on cities we provide evidence that the so-called lens condition is violated, suggesting that from an urban perspective lumpiness matters. (C) 2012 Elsevier B.V. All rights reserved.

Original languageEnglish
Pages (from-to)252-261
Number of pages10
JournalJournal of International Economics
Volume89
Issue number1
Publication statusPublished - Jan-2013

    Keywords

  • Heckscher-Ohlin, Factor endowments, Agglomeration, FACTOR PRICE EQUALIZATION, FACTOR ABUNDANCE THEORY, LENS CONDITION, REGIONAL DATA, CITIES

ID: 5761607