Industrial Upgrading in a Multiple-cone Heckscher-Ohlin Model: The Flying Geese Patterns of Industrial Development

This paper examines empirically how the multiple-cone version of the Heckscher-Ohlin (HO) model fits the "flying geese" patterns of industrial development: a series of industries appear, prosper, then decline and finally disappear one after another. Using Japanese manufacturing data from 1975 to 2006, the analysis shows that the multiple-cone model fits well with the flying geese patterns of Japanese industrial development. The result suggests that part of the industrial upgrading can be explained by the multiple-cone HO model. This also implies that an underlying mechanism of macroeconomic growth is industrial upgrading, part of which can be attributed to capital accumulation.