Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/142517
Authors: 
Kancs, d'Artis
Ciaian, Pavel
Year of Publication: 
2008
Series/Report no.: 
EERI Research Paper Series 05/2008
Abstract: 
In this paper we study factor content of the CEE agricultural trade. In order to account for differences in technology and factor prices in CEE, the theoretical framework of the present study builds on the previous work of Helpman (1984) and Staiger (1986) who consider a trade equilibrium in which factor prices are allowed to differ across countries and Lai and Zhu (2007), who account for international technology differences. In the empirical analysis we examine three hypothesis, which relate cross-country differences in technology, relative factor abundance and transaction costs and market imperfections to the factor content of trade. We find that the first two hypotheses are confirmed by the majority of developed countries, but rejected by roughly one half of the CEE transition country pairs. We find that, when accounting for transaction costs of farm (re)organisation, both hypotheses are confirmed by the majority of CEE country pairs. These findings provide empirical evidence of market imperfections, and particularly, of transaction costs of farm (re)organisation.
Subjects: 
Factor content
bilateral trade
relative factor abundance
technological differences
agriculture
transaction costs
JEL: 
F12
F14
D23
Q12
Q17
Document Type: 
Working Paper

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