The Heckscher-Ohlin-Vanek (HOV) theorem predicts whether a country will be a net exporter of services of a certain factor and the volume of the factor content of trade given the country's and the world's factor endowment information. Recent empirical work has documented that the measured factor content of trade is too small compared to the theoretical prediction and named this special pattern o...

Introduction Since the inauguration of modern, general equilibrium analysis of smuggling by Bhagwati and Hansen (1973), the standard framework for analysis has been some version of the Hecksher-Ohlin-Samuelson (HOS) model. Moreover, with the notable exception of Sheikh (1974), the standard framework depicts smuggling as an activity that uses no domestic resources. In this article we alter the s...

The classical Heckscher-Ohlin-Mundell paradigm states that trade and capital mobility are substitutes, in the sense that trade integration reduces the incentives for capital to ‡ow to capital-scarce countries. In this paper we show that in a world with heterogeneous …nancial development, the classic conclusion does not hold. In particular, in less …nancially developed economies (South), trade a...

So long as both goods are produced and factor intensity reversals do not occur, each price vector (pX , pY ) corresponds to a unique factor price vector. This should be pretty obvious from both the Woodland-Mussa and the Lerner-Pearce diagram. With the same technology and given prices, there is a unique intersection between the zero profit lines in the Woodland-Mussa diagram. Similarly, for giv...

Although it is widely acknowledged that an understanding of mass attitudes about trade is crucial to the political economy of foreign commerce, only a handful of studies have addressed this topic. These studies have focused largely on testing two models, both of which emphasize that trade preferences are shaped by how trade affects an individual's income. The factor endowments or Heckscher-Ohli...

a r t i c l e i n f o This paper examines the effects of conversion of one type of physical trade restrictions into another on the intra-country wage inequality in a standard 2 × 2 × 2 Heckscher–Ohlin–Samuelson model. It shows that a conversion of an import-quota into an equivalent voluntary export restraint raises wage-inequality in the country importing the unskilled-labor intensive good and ...

Conventional trade theory, which combines the Heckscher-Ohlin theory and the Stolper-Samuelson theorem, implies that expanded trade between developed and developing countries will increase wage equality in the former. Th is theory is widely applied. It serves as the basis for estimating the impact of trade on wages using two-sector simulation models and the net factor content of trade. It leads...

The relationship between trade expansion and environmental protection has been characterised by two extreme viewpoints – promoting trade worsens environmental conditions and higher environmental standards impose an economic cost. Two conflicting hypothesis emerge from the debate. One manifestation of the above-described trade off is the hypothesis that increasing trade may encourage developing ...