Factor endowments and production in European regions

Stephen Redding, Mercedes Vera-Martin

Research output: Contribution to journalReview articlepeer-review

7 Scopus citations


This paper analyses patterns of production across 14 industries in 45 regions from 7 European countries since 1975. We estimate an equation from neoclassical trade theory that relates an industry's share of a region's GDP to factor endowments, relative prices and technology. The strict version of the Heckscher-Ohlin model that assumes identical relative prices and technology is rejected against more general alternatives. However, factor endowments play a statistically significant and quantitatively important role in explaining production patterns. Factor endowments are more successful at explaining patterns of production in aggregate industries (Agriculture, Manufacturing and Services) than in disaggregated industries within manufacturing.

Original languageEnglish (US)
Pages (from-to)1-32
Number of pages32
JournalReview of World Economics
Issue number1
StatePublished - Apr 2006
Externally publishedYes

All Science Journal Classification (ASJC) codes

  • General Economics, Econometrics and Finance


  • Europe
  • Factor endowments
  • Heckscher-Ohlin
  • Neoclassical model


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