DP2287 The Dynamics of International Specialization

Author(s): Stephen J. Redding
Publication Date: November 1999
Keyword(s): Distribution Dynamics, Factor Endowments, International Trade, Neoclassical Model
JEL(s): C14, F11, F14
Programme Areas: International Trade and Regional Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=2287

The theoretical literature on trade and growth suggests that comparative advantage is endogenous and evolves over time. However, most of the empirical analysis of international trade flows is essentially static in nature. This paper proposes an empirical model of the dynamics of international specialisation. Employing disaggregated data on twenty industries in seven OECD countries, we examine the evolution of patterns of international specialisation over time and evaluate the role of changes in factor endowments in explaining observed dynamics.