Abstract: Using historical data of Song China(960-1279), we explore the long-term effect of Comparative Advantage based on factor endowments. Southern Song (1127-1279) furthered its Commercial Revolution relative to Northern Song (960-1127) and factor endowments justified different performances in Southern Song. Different factor endowments implied different effects of overseas trade on Commercial Revolution, which were identified by us. We also find that the effect of overseas trade on Commercial Revolution depended on waterway in the economy. Density waterway in the Southern China facilitated the effect of overseas trade on the Commercial Revolution Song China.
Keywords: comparative advantage, commercial revolution, overseas trade
The Chinese version appeared in China Economic Quarterly, 2019(01).