We found a match
Your institution may have access to this item. Find your institution then sign in to continue.
- Title
RELATIONSHIP-SPECIFICITY, INCOMPLETE CONTRACTS, AND THE PATTERN OF TRADE.
- Authors
Nunn, Nathan
- Abstract
Is a country's ability to enforce contracts an important determinant of comparative advantage? To answer this question, I construct a variable that measures, for each good, the proportion of its intermediate inputs that require relationship-specific investments. Combining this measure with data on trade flows and judicial quality, I find that countries with good contract enforcement specialize in the production of goods for which relationship-specific investments are most important. According to my estimates contract enforcement explains more of the pattern of trade than physical capital and skilled labor combined.
- Subjects
COMPARATIVE advantage (International trade); HECKSCHER-Ohlin principle; COMMERCIAL law; INTERNATIONAL trade; PERFECT competition; MONOPOLISTIC competition; INDUSTRIAL concentration; FACTOR proportions; SKILLED labor
- Publication
Quarterly Journal of Economics, 2007, Vol 122, Issue 2, p569
- ISSN
0033-5533
- Publication type
Article
- DOI
10.1162/qjec.122.2.569