Factor Price Equalization in the UK? / Andrew B. Bernard, Stephen Redding, Peter K. Schott, Helen Simpson.

Format:

Book

Author/Creator:

Bernard, Andrew B.

Contributor:

National Bureau of Economic Research.

Redding, Stephen.

Schott, Peter K.

Simpson, Helen.

Series:

Working Paper Series (National Bureau of Economic Research) no. w9052.

NBER working paper series no. w9052

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2002.

Summary:

This paper develops a general test of factor price equalization that is robust to unobserved regional productivity differences, unobserved region-industry factor quality differences and variation in production technology across industries. We test relative factor price equalization across regions of the UK. Although the UK is small and densely-populated, we find evidence of statistically significant and economically important departures from relative factor price equalization. Our estimates suggest three distinct relative factor price areas with a clear spatial structure. We explore explanations for these findings, including multiple cones of diversification, region-industry technology differences, agglomeration and increasing returns to scale.

Notes:

Print version record

July 2002.