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Heckscher Ohlin Vanek Theorem: an excess supply approach

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  • Archana, Srivastava
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    Abstract

    The paper attempts to work out Heckscher Ohlin Vanek theorem with the help of excess supply approach. The study examines trade performance of ten manufacturing industries on a cross section of 46 countries for the year 2009. Factors taken into consideration are primary, secondary and tertiary educated labor, capital stock, arable land. Data sources such as world integrated trade solutions, Barro and Lee database, world development indicators, food and agriculture organisation etc are used to empirically test the theorem. The results suggest that capital stock, higher education and land are the factors which are creating comparative advantage in current trade pattern and further HOV theorem proves out to be still valid in more than 60% of the cases.

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    File URL: http://mpra.ub.uni-muenchen.de/38279/
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    Bibliographic Info

    Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 38279.

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    Date of creation: Mar 2012
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    Handle: RePEc:pra:mprapa:38279

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    Keywords: HOV Theorem; Excess Supply Approach;

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    1. Hakura, Dalia S., 2001. "Why does HOV fail?: The role of technological differences within the EC," Journal of International Economics, Elsevier, vol. 54(2), pages 361-382, August.
    2. Bowen, Harry P & Leamer, Edward E & Sveikauskas, Leo, 1987. "Multicountry, Multifactor Tests of the Factor Abundance Theory," American Economic Review, American Economic Association, vol. 77(5), pages 791-809, December.
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