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Factor endowments and production in European regions

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  • Redding, Stephen
  • Vera-Martin, Mercedes

Abstract

This paper analyses patterns of production across 14 industries in 45 regions from 7 European countries since 1975. We estimate a structural equation derived directly from Heckscher- Ohlin theory that relates an industry’s share of a region’s GDP to factor endowments and relative prices. Factor endowments are found to play a statistically significant and quantitatively important role in explaining production patterns. The explanation is most successful for aggregate industries, such as Agriculture, Manufacturing, and Services, and works less well for disaggregated industries within Manufacturing. We find no evidence that increasing European integration has weakened the relationship between factor endowments and production patterns within countries.

Suggested Citation

  • Redding, Stephen & Vera-Martin, Mercedes, 2001. "Factor endowments and production in European regions," LSE Research Online Documents on Economics 3713, London School of Economics and Political Science, LSE Library.
  • Handle: RePEc:ehl:lserod:3713
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    2. Kozo Kiyota, 2023. "Spatially uneven pace of deindustrialisation within a country," The World Economy, Wiley Blackwell, vol. 46(7), pages 2187-2230, July.
    3. Bradford, Scott C. & Das, Satya & Saha, Anuradha, 2022. "Country size, per-capita income, and comparative advantage: services versus manufacturing," MPRA Paper 115091, University Library of Munich, Germany.
    4. Néstor Duch, 2005. "Vertical linkages, agglomeration and the organization of production in European regions," Working Papers 2005/6, Institut d'Economia de Barcelona (IEB).
    5. Walker, Sarah, 2012. "The (Rail)road to Structural Change: Transportation Costs, Integration, and Production Specialization," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124614, Agricultural and Applied Economics Association.
    6. Néstor Duch, 2005. "Vertical linkages, agglomeration and the organization of production in European regions," Working Papers 2005/6, Institut d'Economia de Barcelona (IEB).

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    More about this item

    Keywords

    Factor Endowments; Heckscher-Ohlin; specialization; European integration;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies

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