We study the Heckscher-Ohlin-Vanek (HOV) model of trade empirically using regional
data rather than country data. Our findings for the Spanish regions suggest that the HOV
model performs remarkably well after relaxing the “strict” assumptions of world factor
price equalisation and world identical and homothetic preferences. We also test whether
Spanish regions share the same production techniques. Allowing for productivityadjusted
factor price equalisation across regions or regional-specific input-output
matrices contributes very little to improve the predictive capacity of the HOV model,
suggesting that the state of technology and choice of techniques is quite similar across
Spanish regions.Francisco Requena is member of INTECO (GRUPOS03/151) and is grateful for financial support from the Generalitat Valenciana, project number GV04B-070
