IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/1115.html
   My bibliography  Save this paper

The Theorems of International Trade with Factor Mobility

Author

Listed:
  • Wilfred J. Ethier
  • Lars E.O. Svensson

Abstract

This paper addresses the relation between goods trade and international factor mobility in general terms. Conditions for factor price equalization are derived for situations with tradein both goods and factors,as well as Rybczynski and Stolper-Sarnuel Sofl theorems. A weak price versionof the Heckscher-Ohlifl theorem is presented, as well as stronger quantity versions.The basic theorems of international trade, suitably interpreted,are shown to hold in their strong versions ifthe number of international markets is at least as large as the number of factors.The crucial dimensionality issue is hence not the relative number of goods and factors per se, but the number of international markets relative to the number of factors. Only the price version of the Heckscher-Ohlifl theorem fails to be essentially preserved by this condition.

Suggested Citation

  • Wilfred J. Ethier & Lars E.O. Svensson, 1983. "The Theorems of International Trade with Factor Mobility," NBER Working Papers 1115, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:1115
    Note: ITI IFM
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w1115.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Svensson, Lars E.O., 1984. "Factor trade and goods trade," Journal of International Economics, Elsevier, vol. 16(3-4), pages 365-378, May.
    2. Jones, Ronald W & Scheinkman, Jose A, 1977. "The Relevance of the Two-Sector Production Model in Trade Theory," Journal of Political Economy, University of Chicago Press, vol. 85(5), pages 909-935, October.
    3. James R. MARKUSEN, 2021. "Factor Movements And Commodity Trade As Complements," World Scientific Book Chapters, in: BROADENING TRADE THEORY Incorporating Market Realities into Traditional Models, chapter 15, pages 325-340, World Scientific Publishing Co. Pte. Ltd..
    4. Alan V. Deardorff, 2011. "The General Validity of the Law of Comparative Advantage," World Scientific Book Chapters, in: Robert M Stern (ed.), Comparative Advantage, Growth, And The Gains From Trade And Globalization A Festschrift in Honor of Alan V Deardorff, chapter 10, pages 73-90, World Scientific Publishing Co. Pte. Ltd..
    5. Woodland, A D, 1977. "Joint Outputs, Intermediate Inputs and International Trade Theory," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 18(3), pages 517-533, October.
    6. Chang, Winston W. & Ethier, Wilfred J. & Kemp, Murray C., 1980. "The theorems of international trade with joint production," Journal of International Economics, Elsevier, vol. 10(3), pages 377-394, August.
    7. Ethier, Wilfred J., 1982. "The general role of factor intensity in the theorems of international trade," Economics Letters, Elsevier, vol. 10(3-4), pages 337-342.
    8. Dixit, Avinash & Woodland, Alan, 1982. "The relationship between factor endowments and commodity trade," Journal of International Economics, Elsevier, vol. 13(3-4), pages 201-214, November.
    9. Rodriguez, Carlos Alfredo, 1975. "International Factor Mobility, Nontraded Goods, and the International Equalization of Prices of Goods and Factors," Econometrica, Econometric Society, vol. 43(1), pages 115-124, January.
    10. J. Peter Neary, 1985. "International Factor Mobility, Minimum Wage Rates, and Factor-Price Equalization: A Synthesis," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 100(3), pages 551-570.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Harry P. Bowen & Jennifer Pédussel Wu, 2013. "Immigrant Specificity and the Relationship between Trade and Immigration: Theory and Evidence," Southern Economic Journal, John Wiley & Sons, vol. 80(2), pages 366-384, October.
    2. James R. Markusen & Keith E. Maskus, 2001. "Multinational Firms: Reconciling Theory and Evidence," NBER Chapters, in: Topics in Empirical International Economics: A Festschrift in Honor of Robert E. Lipsey, pages 71-98, National Bureau of Economic Research, Inc.
    3. Naujoks, Petra & Schmidt, Klaus-Dieter, 1995. "Foreign direct investment and trade in transition countries: Tracing links – A sequel," Kiel Working Papers 704, Kiel Institute for the World Economy (IfW Kiel).
    4. Scholz, Christian M., 1998. "Environmental regulation and its impact on welfare and international competitiveness in a Heckscher-Ohlin framework," Kiel Working Papers 857, Kiel Institute for the World Economy (IfW Kiel).
    5. Meckl, Jürgen, 1994. "Migration, income redistribution, and international capital mobility," Discussion Papers, Series II 230, University of Konstanz, Collaborative Research Centre (SFB) 178 "Internationalization of the Economy".
    6. Roger White, 2010. "Migration and International Trade," Books, Edward Elgar Publishing, number 13670.
    7. Klepper, Gernot & Stahler, Frank, 1998. "Sustainabilty in Closed and Open Economies," Review of International Economics, Wiley Blackwell, vol. 6(3), pages 488-506, August.
    8. Thompson, Henry, 2014. "Energy tariffs in a small open economy," Energy Economics, Elsevier, vol. 44(C), pages 63-67.
    9. Yoshiaki Nakada, 2017. "The effects of energy and commodity prices on commodity output in a three-factor, two-good general equilibrium trade model," Papers 1711.10096, arXiv.org, revised Nov 2018.
    10. Zhang Wei-Bin, 2017. "A Multi-Country Trade and Tourism with Endogenous Capital and Knowledge," Business Systems Research, Sciendo, vol. 8(1), pages 71-91, March.
    11. Wei-Bin Zhang, 2018. "Growth, Research, and Free Trade with Knowledge as Global Public Capital," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 3, pages 37-66.
    12. Alasdair Smith, 1988. "East-West Trade, Embargoes, and Expectations," NBER Chapters, in: Issues in US-EC Trade Relations, pages 153-172, National Bureau of Economic Research, Inc.
    13. Svensson, Lars E O, 1988. "Trade in Risky Assets," American Economic Review, American Economic Association, vol. 78(3), pages 375-394, June.
    14. Springer, Katrin, 2000. "Do We Have to Consider International Capital Mobility in Trade Models?," Kiel Working Papers 964, Kiel Institute for the World Economy (IfW Kiel).
    15. Klepper, Gernot & Stähler, Frank, 1995. "Sustainability and international trade in resources," Kiel Working Papers 712, Kiel Institute for the World Economy (IfW Kiel).
    16. Schwab, Jakob & Ortseifer, Christina, 2015. "Reaping the Gains: Specialization and Capital Flows," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 113194, Verein für Socialpolitik / German Economic Association.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Svensson, Lars E.O., 1984. "Factor trade and goods trade," Journal of International Economics, Elsevier, vol. 16(3-4), pages 365-378, May.
    2. Felbermayr, Gabriel & Grossmann, Volker & Kohler, Wilhelm, 2012. "Migration, International Trade and Capital Formation: Cause or Effect?," IZA Discussion Papers 6975, Institute of Labor Economics (IZA).
    3. Rod Falvey & Udo Kreickemeier, 2017. "Globalization and Factor Returns in Competitive Markets," World Scientific Book Chapters, in: International Trade and Labor Markets Welfare, Inequality and Unemployment, chapter 1, pages 3-25, World Scientific Publishing Co. Pte. Ltd..
    4. Svensson, Lars E O, 1988. "Trade in Risky Assets," American Economic Review, American Economic Association, vol. 78(3), pages 375-394, June.
    5. Gilroy, Bernard Michael, 1991. "Faktorgehalt und internationaler Handel [Factor content and international trade]," MPRA Paper 21037, University Library of Munich, Germany.
    6. Noel Gaston & Douglas R. Nelson, 2013. "Bridging Trade Theory And Labour Econometrics: The Effects Of International Migration," Journal of Economic Surveys, Wiley Blackwell, vol. 27(1), pages 98-139, February.
    7. Meckl, Jürgen, 1994. "Migration, income redistribution, and international capital mobility," Discussion Papers, Series II 230, University of Konstanz, Collaborative Research Centre (SFB) 178 "Internationalization of the Economy".
    8. James Harrigan, 2001. "Specialization and the Volume of Trade: Do the Data Obey the Laws?," NBER Working Papers 8675, National Bureau of Economic Research, Inc.
    9. Subhasankar Chattopadhyay & Rima Mondal, 2017. "Characterisation of Economic Growth in Developing Economies with Informal Sector," Economic Papers, The Economic Society of Australia, vol. 36(1), pages 86-101, March.
    10. Arnaud Costinot, 2009. "An Elementary Theory of Comparative Advantage," Econometrica, Econometric Society, vol. 77(4), pages 1165-1192, July.
    11. Carol L. Osler, 1987. "Factor Prices and Welfare Under Integrated Capital Markets," NBER Working Papers 2447, National Bureau of Economic Research, Inc.
    12. Laura Alfaro & Sebnem Kalemli-Ozcan & Vadym Volosovych, 2008. "Why Doesn't Capital Flow from Rich to Poor Countries? An Empirical Investigation," The Review of Economics and Statistics, MIT Press, vol. 90(2), pages 347-368, May.
    13. Li, Xinjian & Huang, Songshan (Sam) & Song, Changyao, 2017. "China's outward foreign direct investment in tourism," Tourism Management, Elsevier, vol. 59(C), pages 1-6.
    14. Louis Dupuy & Matthew Agarwala, 2014. "International trade and sustainable development," Chapters, in: Giles Atkinson & Simon Dietz & Eric Neumayer & Matthew Agarwala (ed.), Handbook of Sustainable Development, chapter 25, pages 399-417, Edward Elgar Publishing.
    15. Sergio Parrinello, 2002. "The 'institutional factor' in the theory of international trade: new vs. old trade theories," Chapters, in: Stephan Boehm & Christian Gehrke & Heinz D. Kurz & Richard Sturn (ed.), Is There Progress in Economics?, chapter 15, Edward Elgar Publishing.
    16. Falvey, Rod, 1999. "Trade liberalization and factor price convergence," Journal of International Economics, Elsevier, vol. 49(1), pages 195-210, October.
    17. Harry P. Bowen & Jennifer Pédussel Wu, 2013. "Immigrant Specificity and the Relationship between Trade and Immigration: Theory and Evidence," Southern Economic Journal, John Wiley & Sons, vol. 80(2), pages 366-384, October.
    18. Jäkel, Ina C. & Smolka, Marcel, 2017. "Trade policy preferences and factor abundance," Journal of International Economics, Elsevier, vol. 106(C), pages 1-19.
    19. Roger White, 2010. "Migration and International Trade," Books, Edward Elgar Publishing, number 13670.
    20. Anil Lal, 1997. "Import Liberalization, Urban Unemployment, and Capital Mobility: a Welfare Analysis," International Economic Journal, Taylor & Francis Journals, vol. 11(2), pages 21-37.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:1115. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.