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Evidence of Shifts in the Determinants of Japanese Manufacturing Trade 1970-95

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  • Peter Drysdale
  • Ligang Song

Abstract

Using pooled cross-section and time-series data for 17 manufacturing industries in Japan, this paper examines whether and how Japan’s comparative advantage in manufacturing changed over the period 1970 to 1995. The results show that physical and human capital were the main sources of comparative advantage in manufacturing over the whole period, with human capital exerting the stronger influence. A gradual change in the relationship between net exports and factor intensities began to take place in the early to mid-1970s, when unskilled labour turned from being a source of comparative advantage to being a source of comparative disadvantage in manufacturing and human capital started to exert a significant influence on trade. The structural adjustment in Japan’s manufacturing trade with respect to unskilled labour lagged about five to ten years behind the United States.

Suggested Citation

  • Peter Drysdale & Ligang Song, 2001. "Evidence of Shifts in the Determinants of Japanese Manufacturing Trade 1970-95," Asia Pacific Economic Papers 321, Australia-Japan Research Centre, Crawford School of Public Policy, The Australian National University.
    • Handle: RePEc:csg:ajrcau:321
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    File URL: https://crawford.anu.edu.au/pdf/pep/pep-321.pdf
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    References listed on IDEAS

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    1. Urata, Shujiro, 1983. "Factor Inputs and Japanese Manufacturing Trade Structure," The Review of Economics and Statistics, MIT Press, vol. 65(4), pages 678-684, November.
    2. Leamer, Edward E, 1988. "The Sensitivity of International Comparisons of Capital Stock Measures to Different "Real" Exchange Rates," American Economic Review, American Economic Association, vol. 78(2), pages 479-483, May.
    3. Branson, William H. & Monoyios, Nikolaos, 1977. "Factor inputs in U.S. trade," Journal of International Economics, Elsevier, vol. 7(2), pages 111-131, May.
    4. Kellman, Mitchell & Landau, Daniel, 1984. "The nature of Japan's comparative advantage, 1965-80," World Development, Elsevier, vol. 12(4), pages 433-438, April.
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    Cited by:

    1. Nowak-Lehmann D., Felicitas & Vollmer, Sebastian & Martínez-Zarzoso, Inmaculada, 2008. "Does comparative advantage make countries competitive? A comparison of China and Mexico," University of Göttingen Working Papers in Economics 74, University of Goettingen, Department of Economics.
    2. repec:got:cegedp:74 is not listed on IDEAS

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    JEL classification:

    • F10 - International Economics - - Trade - - - General

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