RELATIONSHIP BETWEEN TECHNOLOGICAL DIFFERENCES AND PATTERNS OF TRADE

Bradshaw Brown, Butler James

Abstract


International trade is one of the most important areas of the human endeavour. The wealth of the world are not evenly spread across countries hence the need to engage one another in mutual exchange of resources.  While some countries are endowed with minerals such as gold, diamond and manganese, others are endowed with resources such as oil, Cocoa and river bodies for different purposes. Since time immemorial many researchers have attempted to provide some theoretical guidelines to help explain the potential drivers of trade and its associated challenges. Among the often cited theories include the theory of competitive advantage by David Ricado, the Heckscher-Ohlin model, the Gravity model of trade, Ricardo–Sraffa trade theory, the New Trade Theory and the New New Trade Theory.  The paper discusses the relationship between technological differences across countries, patterns of trade, and returns to factors of production. The paper provides the main economic tradeoffs associated with the issues under investigation and provide an analytical overview of the received theoretical and empirical literatures on the topic


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