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Heckscher Ohlin Vanek Theorem: an excess supply approach

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  • Archana, Srivastava

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.

Suggested Citation

  • Archana, Srivastava, 2012. "Heckscher Ohlin Vanek Theorem: an excess supply approach," MPRA Paper 38279, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:38279
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    File URL: https://mpra.ub.uni-muenchen.de/38279/1/MPRA_paper_38279.pdf
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    References listed on IDEAS

    as
    1. Jong–Wha Lee & Robert J. Barro, 2001. "Schooling Quality in a Cross–Section of Countries," Economica, London School of Economics and Political Science, vol. 68(272), pages 465-488, November.
    2. Anna Schwartz, 2003. "Asset price inflation and monetary policy," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 31(1), pages 1-14, March.
    3. Donald R. Davis & David E. Weinstein, 2001. "An Account of Global Factor Trade," American Economic Review, American Economic Association, vol. 91(5), pages 1423-1453, December.
    4. Harrigan, James, 1995. "Factor endowments and the international location of production: Econometric evidence for the OECD, 1970-1985," Journal of International Economics, Elsevier, vol. 39(1-2), pages 123-141, August.
    5. 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.
    6. 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.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    HOV Theorem; Excess Supply Approach;

    JEL classification:

    • F0 - International Economics - - General
    • F10 - International Economics - - Trade - - - General
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models

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