Resource Structure and Imports: An Analysis of the Relationship between Skill-Intensive Imports and Skill Endowment

Abstract

Countries generally import those goods which they do not produce, and there is a possibility that this might be due to unavailability of resources needed to produce the goods which the countries import. Hence, countries with lower levels of total skill endowment are supposed to import more skill-intensive goods than countries with higher levels of total skill endowment. However, the presence of vertical and horizontal intra-industry trade makes this picture complex. Using a theoretical model derived on the basis of earlier theories and some empirical investigation on data of 72 countries of 3 years, this article tries to find out whether there is any relation between total skill endowment and imports of a country. The results show that there is indeed a relationship, but the nature of this relationship depends on the effect of total skill endowment on the country's skill-intensive exports as well.