With a modified formalization of Heckscher–Ohlin theory as the basis of a novel econometric specification, this paper uses worldwide data over three decades to estimate how the effects of greater openness on industrialization vary among countries with differing endowments of land relative to labour. The results confirm the theoretical prediction that greater openness reduces manufactured output shares in land-abundant countries, while increasing them in land-scarce countries. The implications of these results for trade and development policy are debatable.
STEG Working Paper Series
• Research Theme 1: Firms, Frictions and Spillovers, and Industrial Policy,
Research Theme 3: Agricultural Productivity and Sectoral Gaps
Land Abundance, Openness, and Industrialization
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