Trade pattern reversal: The role of technological change, factor accumulation and government intervention

During the last decades, some Asian countries have experienced a substantial change of their production structure leading to a change of their trade patterns. Whereas formerly high-tech goods were imported, they now constitute an important fraction of the countries' exports. Possible reasons for such a situation to arise are investigated in a model combining Ricardian and Heckscher-Ohlin effects. In addition the role of government intervention on factor accumulation and technological change is studied. A reversal of trade patterns and a catching up and falling behind process can be endogenously explained by these features.