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.