Relative Factor Abundance and Trade
نویسنده
چکیده
I develop a factor content of trade prediction for the Heckscher-OhlinVanek model (HOV) that relates bilateral differences in country endowments to bilateral differences in factor contents. The results are striking. In comparisons of North-South factor contents or factor contents of countries with very different endowments (e.g., with very different capital-labor ratios), there is clear support for an HOV sign prediction. Thus countries with dissimilar endowment ratios also have very different factor content of trade differences as predicted by the HOV model.
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