Factor mobility and the distribution of economic activity in integrated economies: Evidence and implications

Recent research (Bowen, Munandar and Viaene, 2005) shows that for a country who is a member of a fully integrated economy, its shares of the integrated economy’s total output and stocks of productive factors (i.e., physical and human
capital) will be equal. They label this result the equal-share relationship. In this paper, we empirically examine for evidence of the equal-share relationship for
alternative economic groups (i.e., US states, EU countries, Developing Countries and a World comprising 55 countries). Our findings indicate that the equal-share relationship holds strongly for US states, less so for EU countries, but does not hold for Developing Countries or the World.