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Comparative Advantages, Transaction Costs and Factor Content of Agricultural Trade: Empirical Evidence from the CEE

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  • Pavel Ciaian
  • d'Artis Kancs
  • Jan Pokrivcak
Abstract
The present study examines factor content of the CEE transition country agricultural trade. We examine the relative country abundance for labour, capital and land, and test the Heckscher-Ohlin-Vanek (HOV) hypothesis. Our empirical findings suggest that the factor content of agricultural exports and imports is rather similar in CEE and most of the agricultural trade flows do not satisfy the HOV prediction. In order to explain the general lack of agricultural specialisation and the observed paradox in the CEE's agricultural trade, we examine the role of transaction costs and market imperfections. We find that transaction costs and market imperfections distort farm specialisation and hence factor content of agricultural trade.

Suggested Citation

  • Pavel Ciaian & d'Artis Kancs & Jan Pokrivcak, 2008. "Comparative Advantages, Transaction Costs and Factor Content of Agricultural Trade: Empirical Evidence from the CEE," EERI Research Paper Series EERI_RP_2008_03, Economics and Econometrics Research Institute (EERI), Brussels.
    • Handle: RePEc:eei:rpaper:eeri_rp_2008_03
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    Cited by:

    1. D'Artis Kancs & Pavel Ciaian, 2010. "Factor content of bilateral trade: the role of firm heterogeneity and transaction costs," Agricultural Economics, International Association of Agricultural Economists, vol. 41(3‐4), pages 305-317, May.
    2. D'Artis Kancs & Pavel Ciaian, 2010. "Factor content of bilateral trade: the role of firm heterogeneity and transaction costs," Agricultural Economics, International Association of Agricultural Economists, vol. 41(3‐4), pages 305-317, May.
    3. Ciaian, Pavel & Kancs, d'Artis & Pokrivcak, Jan, 2011. "Comparative Advantages, Transaction Costs and Factor Content in Agricultural Trade: Empirical Evidence from the CEE - Vantaggi comparati, costi di transazione e contenuto dei fattori nel commercio agr," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 64(1), pages 67-101.
    4. Anna Bandlerová & Jarmila Lazíková, 2016. "Land lease contract and prior right of lessee to concluding the new land lease contract - case of Slovakia," Juridical Tribune - Review of Comparative and International Law, Bucharest Academy of Economic Studies, vol. 6(2), pages 304-320, December.
    5. d’Artis Kancs & Pavel Ciaian, 2012. "The Factor Content of Heterogeneous Firm Trade," The World Economy, Wiley Blackwell, vol. 35(3), pages 373-393, March.

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    More about this item

    Keywords

    Factor Content; Agricultural Trade; Comparative Advantages; Transaction Costs;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade

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