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A Test of the Factor Endowments Model of Trade in a Rapidly Industrializing Country: The Case of Korea


  • Ramazani, Reza M
  • Maskus, Keith E


The authors perform a fully specified test of the Heckscher-Ohlin-Vanek (HOV) multifactor content theorem of international trade in the context of a rapidly industrializing economy, the Republic of Korea, in 1970 and 1980. The test involves a comparison of independent measures of relative factor endowments with endowment rankings revealed by Korea's international trade and total factor intensities. Interest arises in this effort because Korea's industrialization presents a new set of circumstances in which to test the Heckscher-Ohlin-Vanek theorem. The results strongly suggest that the revealed factor endowments departed significantly from actual factor supplies. The authors discuss potential reasons for this divergence. Copyright 1993 by MIT Press.

Suggested Citation

  • Ramazani, Reza M & Maskus, Keith E, 1993. "A Test of the Factor Endowments Model of Trade in a Rapidly Industrializing Country: The Case of Korea," The Review of Economics and Statistics, MIT Press, vol. 75(3), pages 568-572, August.
  • Handle: RePEc:tpr:restat:v:75:y:1993:i:3:p:568-72

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    References listed on IDEAS

    1. Hansen, Lars Peter, 1982. "Large Sample Properties of Generalized Method of Moments Estimators," Econometrica, Econometric Society, vol. 50(4), pages 1029-1054, July.
    2. Andrews, Donald W. K. & Fair, Ray C., 1992. "Estimation of polynomial distributed lags and leads with end point constraints," Journal of Econometrics, Elsevier, vol. 53(1-3), pages 123-139.
    3. Fair, Ray C, 1993. "Testing the Rational Expectations Hypothesis in Macroeconometric Models," Oxford Economic Papers, Oxford University Press, vol. 45(2), pages 169-190, April.
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    Cited by:

    1. Beatriz Muriel & Cristina Terra, 2009. "Sources of Comparative Advantages in Brazil," Review of Development Economics, Wiley Blackwell, vol. 13(1), pages 15-27, February.
    2. Kitty K. Chan & Jeffrey B. Nugent, 1999. "Factor Endowments, Trade Liberalization, And The Future Of Apec Trade Patterns," Contemporary Economic Policy, Western Economic Association International, vol. 17(4), pages 517-529, October.
    3. Randall Morck & Bernard Yeung, 2017. "East Asian Financial and Economic Development," NBER Working Papers 23845, National Bureau of Economic Research, Inc.
    4. Randall Morck & Bernard Yeung, 2017. "East Asian Financial and Economic Development," Working Papers id:12112, eSocialSciences.
    5. Vermeulen, Philip, 2004. "Factor content, size, and export propensity at the firm level," Economics Letters, Elsevier, vol. 82(2), pages 249-252, February.
    6. Elio Londero, 2001. "Primary-input intensities under alternative measures of rent content," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 10(4), pages 429-450.

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