Testing the General Validity of the Heckscher-Ohlin Theorem: The Natural Experiment of Japan
AbstractWe exploit Japan's 19th century opening up to trade to test a general formulation of the Heckscher-Ohlin theorem. This formulation is based on Ohlin's measure of factor scarcity where autarky factor prices impose a refutable prediction on the economy's factor content of trade. Our test combines factor price data in Japan's autarky period with commodity trade data and a technology matrix in Japan's early free trade period. Our technology matrix is derived from a major Japanese survey of agricultural techniques during the early Meiji period, accounts by European visitors and numerous studies by Japanese and western scholars that draw on village records, business accounts and other historical sources. Evaluating Japan's factor content of trade during 1868-1875 at the corresponding autarky factor prices, we fail to reject the Heckscher-Ohlin prediction in each sample year.
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Bibliographic InfoPaper provided by Institute of Economic Research, Hitotsubashi University in its series Global COE Hi-Stat Discussion Paper Series with number gd09-058.
Date of creation: Apr 2009
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Other versions of this item:
- 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.
- Daniel M. Bernhofen & John C. Brown, 2011. "Testing the General Validity of the Heckscher-Ohlin Theorem: The Natural Experiment of Japan," CESifo Working Paper Series 3586, CESifo Group Munich.
- 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.
- 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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