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What Do Rich Countries Trade with Each Other? R&D and the Composition of U.S. and Swedish Trade

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  • Magnus Blomstrom
  • Robert E. Lipsey
  • Lennart Ohlsson

Abstract

A long tradition in international economics explains comparative advantage by differences between countries in their stage of development, or their endowments of land, labor, and capital, and suggests that universal development will reduce the importance of trade. Sweden and the United States possess similar factor endowments and have converged in overall productivity, but their bilateral trade has grown. The example of these two countries suggests that mutual technological progress may promote trade, with the new basis for specialization being the different technology levels or R&D intensities of the goods being traded, rather than the initial endowments.

Suggested Citation

  • Magnus Blomstrom & Robert E. Lipsey & Lennart Ohlsson, 1989. "What Do Rich Countries Trade with Each Other? R&D and the Composition of U.S. and Swedish Trade," NBER Working Papers 3140, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:3140
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    References listed on IDEAS

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    1. Irving B. Kravis & Robert E. Lipsey, 1989. "Technological Characteristics of Industries and the Competitiveness of the U.S. and its Multinational Firms," NBER Working Papers 2933, National Bureau of Economic Research, Inc.
    2. repec:bla:revinw:v:35:y:1989:i:3:p:245-64 is not listed on IDEAS
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    Cited by:

    1. Van Wijnbergen, S. & Venables, Tony, 1993. "Location choice," LSE Research Online Documents on Economics 2099, London School of Economics and Political Science, LSE Library.
    2. James R. Markusen & Keith E. Maskus, 2001. "Multinational Firms: Reconciling Theory and Evidence," NBER Chapters, in: Topics in Empirical International Economics: A Festschrift in Honor of Robert E. Lipsey, pages 71-98, National Bureau of Economic Research, Inc.
    3. Valeria Gattai, 2010. "Firm's intangible assets and multinational activity: Full versus shared ownership," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 19(4), pages 553-589.
    4. Valeria Gattai, 2008. "A Tale of Three Countries: Italian, Spanish and Swiss Manufacturing Operations in China," The World Economy, Wiley Blackwell, vol. 31(8), pages 969-992, August.
    5. Kokko, Ari, 2006. "The Home Country Effects Of Fdi In Developed Economies," EIJS Working Paper Series 225, Stockholm School of Economics, The European Institute of Japanese Studies.
    6. Blomstrom, Magnus & Kokko, Ari, 2000. "Outward Investment, Employment, and Wages in Swedish Multinationals," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 16(3), pages 76-89, Autumn.
    7. Blomström, Magnus & Kokko, Ari, 1994. "Home Country Effects of Foreign Direct Investment: Evidence from Sweden," CEPR Discussion Papers 931, C.E.P.R. Discussion Papers.
    8. Garcia Pires, Armando José, 2006. "International Trade with Competitiveness Effects in R&D," CEPR Discussion Papers 5547, C.E.P.R. Discussion Papers.
    9. X.N. Iraki, 2018. "Is Kenya Facing East or West: An Empirical Analysis," International Business Research, Canadian Center of Science and Education, vol. 11(12), pages 134-144, December.
    10. Blomström, Magnus & Kokko, Ari & Sjöholm, Fredrik, 2002. "Growth & Innovation Policies For a Knowledge Economy. Experiences From Finland, Sweden & Singapore," EIJS Working Paper Series 156, Stockholm School of Economics, The European Institute of Japanese Studies.

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