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Labour-skill availability, economies of scale and international trade flows: An empirical study.

Chaterjee, Srikanta. (1969) Labour-skill availability, economies of scale and international trade flows: An empirical study. Doctoral thesis, University of Surrey (United Kingdom)..

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The purpose of this study is to investigate empirically into some of the important factors that are supposed to determine a country's international trade. The first two chapters undertake a broad survey of, first, the important theories of international trade - to wit the comparative costs and the factor-proportions theories and, second, the empirical works done on these theories. Relevant criticisms of these empirical exercises - pointing out their shortcomings - have been made. An important offshoot of the 'Leontief paradox' had been the recognition of the differences that exist in labour-skill endowments of different countries. Labour as a factor of production should therefore be regarded as non-homogeneous, The third chapter starts with a survey and criticism of Donald B. Keesing's recent empirical work on labour-skill-endowments and American foreign trade and goes on to investigate the relationship between skill-intensities of U. S. industries and their share of third market exports relative to the share of identical British industries. It also investigates the relationship between net cost ratios of industries and their skill-intensities. Two alternative definitions of skill-intensities have been used - one is the ratio of the number of skilled-labour employed to the number of unskilled, and the other is the share of salary in value-added. Results obtained show that relative export-share can be explained largely by skill-intensities but net costs can not be so explained. The fourth chapter extends the same investigation to the case of India's foreign trade - firstly her exports to and imports from all countries and then her bilateral trade-pattern with ten different countries belonging to different stages of economic development. Results obtained are highly consistent with the hypothesis - the only exception being the total import pattern, which is not related to skill-intensities. The fifth and the final chapter seeks to introduce an additional variable, viz. the relative intercountry Industry-size and relative intercountry firm concentration of industries. Empirical studies with data from Indian industries suggest that some of the more important of the Indian manufacturing industries are subject to internal economies of scale* Similar studies with data from the USA and the UK suggest high correlation between relative industry-size and relative firm-size on the one hand and relative export-share on the other. Multiple regression equations with the ratios of third country export-share (of USA and UK on the one hand and USA and India on the other) as the dependent variable and skill-intensities and relative size of industries as the independent ones were fitted to see if the size-element as an additional variable can explain trade-performances better than skill-intensities alone. Results in both case corroborate the hypothesis that size of industries is an important determinant of trade-pattern of a country. However, the US-UK trade pattern is better explained in terms of size and skill-intensities than the UK-India export-pattern. This is presumably due to the very great differences in skill-endowments and size-structure of industries between USA and India and also to the fact that India exports very few manufactured products compared to the USA. To emphasise the importance of 'Research and Development' in determining trade-pattern of developed countries mention has also been made of the more important works done along this line. Our findings thus lend further support to the hypothesis that skilled labour endowments of a country is an important determinant of its trade pattern. Together with size-structure of industries they can explain a country 's trade-pattern very significantly.

Item Type: Thesis (Doctoral)
Divisions : Theses
Authors :
Chaterjee, Srikanta.
Date : 1969
Contributors :
Additional Information : Thesis (M.Phil.)--University of Surrey (United Kingdom), 1969.
Depositing User : EPrints Services
Date Deposited : 22 Jun 2018 13:00
Last Modified : 06 Nov 2018 16:52

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