A Symmetry Hypothesis And Measurement Biases In The Factor Content Of Trade
Source: Purdue University (Krannert)
Laura Puzzello revisits Reimer (2006), and Trefler and Zhu (2005, 2006) (RTZ) tests of the Vanek proposition in the presence of international differences in production techniques and global production sharing. In this framework, knowing the bilateral details of each country's input-output structure is key to the correct calculation of the factor content of trade. This paper uses surveybased input-output coefficients from the Asian Input-Output tables (AIO) that do provide bilateral detail. Exploiting methodological differences in the compilation of the AIO tables and the data underlying RTZ studies, I empirically test the symmetry hypothesis and find that it fails.