Specialization, Factor Accumulation and Development

35 Pages Posted: 24 Aug 2004 Last revised: 28 Jul 2022

See all articles by Doireann Fitzgerald

Doireann Fitzgerald

Federal Reserve Banks - Federal Reserve Bank of Minneapolis

Juan Carlos Hallak

University of San Andres (UMSA) - Department of Economics; National Bureau of Economic Research (NBER)

Date Written: July 2004

Abstract

We estimate the effect of factor proportions on the pattern of manufacturing specialization in a cross-section of OECD countries, taking into account that factor accumulation responds to productivity. We show that the failure to control for productivity differences produces biased estimates. Our model explains 2/3 of the observed differences in the pattern of specialization between the poorest and richest OECD countries. However, because factor proportions and the pattern of specialization co-move in the development process, their strong empirical relationship is not sufficient to determine whether specialization is driven by factor proportions, or by other mechanisms also correlated with level of development.

Suggested Citation

Fitzgerald, Doireann and Hallak, Juan Carlos, Specialization, Factor Accumulation and Development (July 2004). NBER Working Paper No. w10638, Available at SSRN: https://ssrn.com/abstract=579785

Doireann Fitzgerald

Federal Reserve Banks - Federal Reserve Bank of Minneapolis ( email )

90 Hennepin Avenue
Minneapolis, MN 55480
United States

Juan Carlos Hallak (Contact Author)

University of San Andres (UMSA) - Department of Economics ( email )

Vito Dumas 284
B1644BID Victoria, Buenos Aires
Argentina

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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