IDEAS home Printed from https://ideas.repec.org/a/ucp/jpolec/v112y2004i1p48-67.html
   My bibliography  Save this article

A Direct Test of the Theory of Comparative Advantage: The Case of Japan

Author

Listed:
  • Daniel M. Bernhofen
  • John C. Brown

Abstract

We exploit Japan's sudden and complete opening up to international trade in the 1860s to test the empirical validity of one of the oldest and most fundamental propositions in economics: the theory of comparative advantage. Historical evidence supports the assertion that the characteristics of the Japanese economy at the time were compatible with the key assumptions of the neoclassical trade model. Using detailed product-specific data on autarky prices and trade flows, we find that the autarky price value of Japan's trade is negative for each year of the period 186875. This confirms the prediction of the theory.

Suggested Citation

  • Daniel M. Bernhofen & John C. Brown, 2004. "A Direct Test of the Theory of Comparative Advantage: The Case of Japan," Journal of Political Economy, University of Chicago Press, vol. 112(1), pages 48-67, February.
    • Handle: RePEc:ucp:jpolec:v:112:y:2004:i:1:p:48-67
    DOI: 10.1086/379944
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1086/379944
    File Function: main text
    Download Restriction: Access to the online full text or PDF requires a subscription.
    File URL: https://libkey.io/10.1086/379944?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Howe, Christopher, 1996. "The Origins of Japanese Trade Supremacy," University of Chicago Press Economics Books, University of Chicago Press, number 9780226354859, October.
    2. Alan Deardorff, 1994. "Exploring the limits of comparative advantage," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 130(1), pages 1-19, March.
    3. Douglas A. Irwin, 2001. "The Welfare Cost of Autarky: Evidence from the Jeffersonian Trade Embargo, 1807-1809," NBER Working Papers 8692, National Bureau of Economic Research, Inc.
    4. Yasuba, Yasukichi, 1986. "Standard of Living in Japan Before Industrialization: From What Level Did Japan Begin? A Comment," The Journal of Economic History, Cambridge University Press, vol. 46(1), pages 217-224, March.
    5. Alan V. Deardorff, 2011. "The General Validity of the Law of Comparative Advantage," World Scientific Book Chapters, in: Robert M Stern (ed.), Comparative Advantage, Growth, And The Gains From Trade And Globalization A Festschrift in Honor of Alan V Deardorff, chapter 10, pages 73-90, World Scientific Publishing Co. Pte. Ltd..
    6. Jeffrey G. Williamson, 1999. "The Impact of Globalization on Pre-Industrial, Technologically Quiescent Economies," NBER Historical Working Papers 0115, National Bureau of Economic Research, Inc.
    7. Duffy, William J. & Yamamura, Kozo, 1971. "Monetization and integration of markets in Tokugawa Japan: A spectral analysis," Explorations in Economic History, Elsevier, vol. 8(4), pages 395-423.
    8. McCloskey, Donald N, 1976. "Does the Past Have Useful Economics?," Journal of Economic Literature, American Economic Association, vol. 14(2), pages 434-461, June.
    9. Choi, E. Kwan & Harrigan, James, 2003. "Handbook of International Trade," Staff General Research Papers Archive 11375, Iowa State University, Department of Economics.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Daniel M. Bernhofen & John C. Brown, 2005. "An Empirical Assessment of the Comparative Advantage Gains from Trade: Evidence from Japan," American Economic Review, American Economic Association, vol. 95(1), pages 208-225, March.
    2. Daniel Bernhofen, 2010. "The Empirics of General Equilibrium Tade Theory: What Have we Learned?," CESifo Working Paper Series 3242, CESifo.
    3. Louis Dupuy & Matthew Agarwala, 2014. "International trade and sustainable development," Chapters, in: Giles Atkinson & Simon Dietz & Eric Neumayer & Matthew Agarwala (ed.), Handbook of Sustainable Development, chapter 25, pages 399-417, Edward Elgar Publishing.
    4. Kozo Kiyota, 2011. "A test of the law of comparative advantage, revisited," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 147(4), pages 771-778, November.
    5. Alan V Deardorff, 2011. "How Robust is Comparative Advantage?," World Scientific Book Chapters, in: Robert M Stern (ed.), Comparative Advantage, Growth, And The Gains From Trade And Globalization A Festschrift in Honor of Alan V Deardorff, chapter 17, pages 183-195, World Scientific Publishing Co. Pte. Ltd..
    6. Svensson, Lars E.O., 1984. "Factor trade and goods trade," Journal of International Economics, Elsevier, vol. 16(3-4), pages 365-378, May.
    7. repec:bla:etrans:v:15:y:2007:i::p:825-843 is not listed on IDEAS
    8. Michael O. Moore & Maurizio Zanardi, 2011. "Trade Liberalization and Antidumping: Is There a Substitution Effect?," Review of Development Economics, Wiley Blackwell, vol. 15(4), pages 601-619, November.
    9. Chad P. Bown, 2010. "China's WTO Entry: Antidumping, Safeguards, and Dispute Settlement," NBER Chapters, in: China's Growing Role in World Trade, pages 281-337, National Bureau of Economic Research, Inc.
    10. Reimer, Jeffrey J., 2012. "On the economics of virtual water trade," Ecological Economics, Elsevier, vol. 75(C), pages 135-139.
    11. Sajid Anwar, 2008. "Labor Inflow Induced Wage Inequality and Public Infrastructure," Review of Development Economics, Wiley Blackwell, vol. 12(4), pages 792-802, November.
    12. Giuseppe Bognetti & Michele Santoni, 2010. "Can domestic unions gain from offshoring?," Journal of Economics, Springer, vol. 100(1), pages 51-67, May.
    13. Nobuaki Yamashita, 2011. "Can India become an export platform for global operations of MNCs? Perspectives from Japanese and United States MNC affiliates," STUDIES IN TRADE AND INVESTMENT, in: Witada Anukoonwattaka & Mia Mikic (ed.), India: A New Player in Asian Production Networks?, Studies in Trade and Investment 75, chapter 3, pages 54-77, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP).
    14. Bassino, Jean-Pascal & Broadberry, Stephen & Fukao, Kyoji & Gupta, Bishnupriya & Takashima, Masanori, 2019. "Japan and the great divergence, 730–1874," Explorations in Economic History, Elsevier, vol. 72(C), pages 1-22.
    15. Robert M. Feinberg & Kara M. Reynolds, 2006. "The Spread of Antidumping Regimes and the Role of Retaliation in Filings," Southern Economic Journal, John Wiley & Sons, vol. 72(4), pages 877-890, April.
    16. Clarke, George R.G., 2005. "Beyond tariffs and quotas : why don't African manufacturers export more?," Policy Research Working Paper Series 3617, The World Bank.
    17. Nazif Durmaz & John Kagochi, 2018. "Democracy and Inter-Regional Trade Enhancement in Sub-Saharan Africa: Gravity Model," Economies, MDPI, vol. 6(3), pages 1-17, August.
    18. Robert R. Hewitt, 2014. "Globalization and Landscape Architecture," SAGE Open, , vol. 4(1), pages 21582440135, February.
    19. James E. Anderson, 2011. "The Gravity Model," Annual Review of Economics, Annual Reviews, vol. 3(1), pages 133-160, September.
    20. James Harrigan, 2001. "Specialization and the Volume of Trade: Do the Data Obey the Laws?," NBER Working Papers 8675, National Bureau of Economic Research, Inc.
    21. Booth, G. Geoffrey & Gurun, Umit G., 2008. "Volatility clustering and the bid-ask spread: Exchange rate behavior in early Renaissance Florence," Journal of Empirical Finance, Elsevier, vol. 15(1), pages 131-144, January.

    More about this item

    Lists

    This item is featured on the following reading lists, Wikipedia, or ReplicationWiki pages:
    1. A Direct Test of the Theory of Comparative Advantage: The Case of Japan (JPE 2004) in ReplicationWiki

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ucp:jpolec:v:112:y:2004:i:1:p:48-67. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Journals Division (email available below). General contact details of provider: https://www.journals.uchicago.edu/JPE .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.