The Hescher-Ohlin-Vanek Theorem without Factor Price Equalization
نویسنده
چکیده
The Heckscher-Ohlin-Vanek Theorem has been used to predict the factor contents of trade under the ideal assumption that factor prices are equalized. Available empirical studies have shown that the measured contents of factor trade significantly differ from the predicted factor contents of trade. This paper employs a more general definition of factor abundance in the presence of factor price disparity and derives a modified HOV theorem to predict the factor contents of trade without factor price equalization. This method requires the use of the factor prices as well as the input-output functions of the source country for each traded good. Contact Address: E. Kwan Choi, Department of Economics, Iowa State University, Ames, IA 50011, Tel: 515-294-5999, [email protected] The Hescher-Ohlin-Vanek Theorem without Factor Price Equalization
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