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Relative Endowments and the Volume of Trade

Author

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  • Tong Soo, Kwok

    (Lancaster University)

Abstract

This paper provides evidence that the volume of trade may increase as countries’ relative endowments become more similar. A model is developed that can explain this phenomenon. The model is a four-good version of the Davis (1995) Heckscher-Ohlin-Ricardo model of international trade based on technological and factor endowment differences across countries. In the model, trade volumes may increase with greater similarity in relative endowments, because productivity differences across countries mean that countries’ production becomes increasingly specialised the more similar are their relative endowments.

Suggested Citation

  • Tong Soo, Kwok, 2009. "Relative Endowments and the Volume of Trade," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 24, pages 744-764.
    • Handle: RePEc:ris:integr:0492
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    Cited by:

    1. Soo, Kwok Tong, 2011. "The gains from trade revisited," International Review of Economics & Finance, Elsevier, vol. 20(2), pages 193-201, April.
    2. Yasin Kuso, 2018. "Impact of Currency Union on Trade: Comparative Analysis of EMU and SACU - Gravity Model Approach," Academic Journal of Economic Studies, Faculty of Finance, Banking and Accountancy Bucharest,"Dimitrie Cantemir" Christian University Bucharest, vol. 4(4), pages 102-115, December.

    More about this item

    Keywords

    international trade; trade volume; integrated equilibrium;
    All these keywords.

    JEL classification:

    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade

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