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A Re-Examination of the Linder Hypothesis: A Random-Effects Tobit Approach

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  • M. A. Mcpherson
  • M. R. Redfearn
  • M. A. Tieslau

Abstract

This paper examines one of the main theories of international trade, the Linder hypothesis, using data from the OECD countries. The paper makes two primary contributions. First, significant empirical evidence is found in support of Linder's hypothesis regarding demand similarity for 18 of the 19 OECD countries under investigation here. Second, the use of a censored dependent variable in this analysis corrects a major methodological shortcoming in the existing literature by including data on all potential trading partners, even when the given OECD country has a zero or negative desire to export to that potential trading partner. [F10]

Suggested Citation

  • M. A. Mcpherson & M. R. Redfearn & M. A. Tieslau, 2000. "A Re-Examination of the Linder Hypothesis: A Random-Effects Tobit Approach," International Economic Journal, Taylor & Francis Journals, vol. 14(3), pages 123-136.
    • Handle: RePEc:taf:intecj:v:14:y:2000:i:3:p:123-136
    DOI: 10.1080/10168730000000032
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    1. Hirsch, Zeev & Lev, Baruch, 1973. "Trade and per capita income differentials: a test of the Burenstam-Linder hypothesis," World Development, Elsevier, vol. 1(9), pages 11-17, September.
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    6. Bowen, Harry P & Leamer, Edward E & Sveikauskas, Leo, 1987. "Multicountry, Multifactor Tests of the Factor Abundance Theory," American Economic Review, American Economic Association, vol. 77(5), pages 791-809, December.
    7. Heston, Alan & Summers, Robert, 1996. "International Price and Quantity Comparisons: Potentials and Pitfalls," American Economic Review, American Economic Association, vol. 86(2), pages 20-24, May.
    8. Maskus, Keith E., 1985. "A test of the Heckscher-Ohlin-Vanek theorem: The Leontief commonplace," Journal of International Economics, Elsevier, vol. 19(3-4), pages 201-212, November.
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    3. Bellon, Mauricio R. & Hellin, Jon, 2011. "Planting Hybrids, Keeping Landraces: Agricultural Modernization and Tradition Among Small-Scale Maize Farmers in Chiapas, Mexico," World Development, Elsevier, vol. 39(8), pages 1434-1443, August.
    4. Mina Baliamoune-Lutz & Abdoul‘ Ganiou Mijiyawa, 2020. "What Can Trade Tell Us About Economic Transformation? Composition of Trade and Structural Transformation in African Countries," Research papers & Policy papers 1909, Policy Center for the New South.
    5. Matthew Q. McPherson & William N. Trumbull, 2004. "Winners and Losers: The Effect of Cuba's Political-Based Trading Policies," Annual Proceedings, The Association for the Study of the Cuban Economy, vol. 14.
    6. NOWAK-LEHMANN D., Felicitas & HERZER, Dierk & VOLLMER, Sebastian, 2007. "The Free Trade Agreement Between Chile And The Eu: Its Potential Impact On Chile’S Export Industry," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 7(1).
    7. Inmaculada Martínez-Zarzoso & Sebastian Vollmer, 2016. "Bilateral Trade Flows and Income Distribution Similarity," PLOS ONE, Public Library of Science, vol. 11(5), pages 1-12, May.
    8. Begüm Tuğlu, 2016. "From Culturazing Nature to Naturalizing Culture: The Differing Function of Animal Imagery in Defining Bodies from Homer’s Odysseus to Margaret Atwood’s The Penelopiad," European Journal of Social Sciences Education and Research Articles, Revistia Research and Publishing, vol. 3, ejser_v3_.
    9. Barbara M. Roberts & Abdulaziz Almahmood, 2009. "Source Country Characteristics and the Inflow of Foreign Direct Investment into Saudi Arabia," The World Economy, Wiley Blackwell, vol. 32(12), pages 1730-1746, December.
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    12. Bailey Klinger, 2009. "Is South–South Trade A Testing Ground For Structural Transformation?," UNCTAD Blue Series Papers 40, United Nations Conference on Trade and Development.
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