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An Account of Global Factor Trade

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  • Davis, D.R.
  • Weinstein, D.E.

Abstract

A half-century of empirical work on the factor proportions theory has but has failed to devise simple amendments that bring theory and data into reasonable congruence. Our study considers standard and novel hypotheses regarding the failures of the Heckscher-Ohlin-Vanek formulation and is the first to examine these directly on the technology and absorption data of interest. We show how a few simple and plausible amendments, verified directly by this data, suffice for a striking confirmation of the HOV theory. Countries export the services of abundant factors and in approximately the right magnitude. HOV works.

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Bibliographic Info

Paper provided by Research Seminar in International Economics, University of Michigan in its series Working Papers with number 435.

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Length: 84 pages
Date of creation: 1999
Date of revision:
Handle: RePEc:mie:wpaper:435

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Postal: ANN ARBOR MICHIGAN 48109
Web page: http://www.fordschool.umich.edu/rsie/
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Keywords: INTERNATIONAL TRADE;

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References

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  1. Trefler, Daniel & Zhu, Susan Chun, 2010. "The structure of factor content predictions," Journal of International Economics, Elsevier, vol. 82(2), pages 195-207, November.
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