An Evaluation of Factor Endowments and Protection as Determinants of Japanese and American Foreign Trade

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An Evaluation of Factor Endowments and Protection as Determinants of Japanese and American Foreign Trade

Author Info

Robert W. Staiger
Alan V. Deardorff
Robert M. Stern

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Abstract

The authors consider the relationship between the factor content of Japanes e and American foreign trade and examine empirically whether discrepa ncies between the Heckscher-Ohlin theoretical predictions and the obs erved patterns of trade can be attributed to protection. The Michigan Model of World Production and Trade is used for computational purpos es. They find some evidence of discrepancies between predicted and ob served trade patterns, but removal of protection either worsens these discrepancies or reduces them by only a small amount. Some possible reasons for the empirical shortcomings of the Heckscher-Ohlin theory are offered in conclusion.

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Publisher Info
Article provided by Canadian Economics Association in its journal Canadian Journal of Economics.

Volume (Year): 20 (1987)
Issue (Month): 3 (August)
Pages: 449-63
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Handle: RePEc:cje:issued:v:20:y:1987:i:3:p:449-63

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Cited by:
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Keith Maskus & Shuichiro Nishioka, 2008. "Development-Related Biases in Factor Productivities and the HOV Model of Trade," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
Keith E. Maskus & Allan Webster, 1995. "Factor Specialization in U.S. and U.K. Trade: Simple Departures from the Factor-content Theory," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 131(III), pages 419-439, September. [Downloadable!]
Donald R. Davis & David E. Weinstein, 2001. "The Factor Content of Trade," NBER Working Papers 8637, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
Other versions:
- Donald R. Davis & David E. Weinstein, 2002. "The factor content of trade," Discussion Papers 0102-01, Columbia University, Department of Economics. [Downloadable!]

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