Testing the General Validity of the Heckscher-Ohlin Theorem: The Natural Experiment of Japan
AbstractWe exploit Japan’s 19th century move from autarky to free trade to provide the first test of the general validity of the price formulation of the Heckscher-Ohlin theorem. In this formulation a country’s autarky factor price vector imposes a single refutable prediction on the economy’s factor content of trade. Our test combines factor price data from Japan’s late autarky period with Japan’s factor content of trade calculated with the technologies of the country of origin of traded goods. The direct and indirect input requirements are constructed from many historical sources, including a major Japanese survey of agricultural techniques and a rich set of 19th century comparative cost studies. Evaluating Japan’s factor content of trade during 1865-1876 at autarky factor prices, we fail to reject the Heckscher-Ohlin hypothesis in each sample year.
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Bibliographic InfoPaper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 3586.
Date of creation: 2011
Date of revision:
testing the price version of Heckscher-Ohlin; the natural experiment of Japan;
Other versions of this item:
- Daniel M. Bernhofen & John C. Brown, 2009. "Testing the General Validity of the Heckscher-Ohlin Theorem: The Natural Experiment of Japan," Global COE Hi-Stat Discussion Paper Series gd09-058, Institute of Economic Research, Hitotsubashi University.
- Daniel M. Bernhofen & John C.Brown, . "Testing the general validity of the Heckscher-Ohlin theorem: the natural experiment of Japan," Discussion Papers 11/15, University of Nottingham, GEP.
- Bernhofen, Daniel M. & Brown, John C., 2009. "Testing the general validity of the Heckscher-Ohlin Theorem: the natural experiment of Japan," CCES Discussion Paper Series 13, Center for Research on Contemporary Economic Systems, Graduate School of Economics, Hitotsubashi University.
- F11 - International Economics - - Trade - - - Neoclassical Models of Trade
- F14 - International Economics - - Trade - - - Empirical Studies of Trade
- N10 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - General, International, or Comparative
- N75 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - Asia including Middle East
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