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Global production sharing and trade in the services of factors

This article develops an approach to measuring the factor content of trade when intermediate inputs are traded, and techniques differ for reasons such as factor price differences. An empirical section documents the importance of intermediates and shows that they mitigate cross-country differences in...

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Published in:Journal of international economics 2006-03, Vol.68 (2), p.384-408
Main Author: Reimer, Jeffrey J.
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Language:English
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description This article develops an approach to measuring the factor content of trade when intermediate inputs are traded, and techniques differ for reasons such as factor price differences. An empirical section documents the importance of intermediates and shows that they mitigate cross-country differences in the factor content of finished goods. The performance of recent models of factor service trade is also evaluated. Existing approaches impute the factor content of imported intermediates with domestic techniques and tend to overstate how well those models perform. The framework developed here can help reconcile general-equilibrium trade models with actual patterns of trade.
doi_str_mv 10.1016/j.jinteco.2005.07.007
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ispartof Journal of international economics, 2006-03, Vol.68 (2), p.384-408
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source International Bibliography of the Social Sciences (IBSS); Elsevier
subjects Comparative advantage
Cross-national analysis
Economic models
Empirical tests
Factor content
Heckscher–Ohlin
Intermediates
International economics
International trade
Production
Studies
Technology
Trade in services
World economy
title Global production sharing and trade in the services of factors
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