An empirical investigation of the Heckscher-Ohlin theorem [microform]
- Bib ID:
- 3287197
- Format:
- Book and Microform
- Author:
- Clifton, David Samuel Jr
- Description:
- 144 p.
- Summary:
-
The Heckscher-Ohlin theorem along with the factor-price equalization theorem provide the basis for the modern theory of international trade. Since the empirical tests of the Heckscher-Ohlin theorem have, in general, yielded results contrary to the theorem it is important to critique the empirical literature and to seek further to substantiate or reject the theorem. A multi-commodity, two-country, and two-factor model is constructed in order to examine the Heckscher-Ohlin theorem with either balanced or unbalanced trade. Within the context of the model a critique of the empirical literature was conducted. According to previous studies the pattern of trade between the rest of the world and the United States, Japan, West Germany, and India supported the theorem.
The empirical results of the studies presented in the literature are not as "paradoxical" as they have seemed when consideration is given to the countries' capital-labor endowments relative to the rest of the world and the results obtained by Williams which reserved Leontief's findings for the United States. Support for the Heckscher-Ohlin theorem is provided by the studies for Canada, East Germany, West Germany, India and the United States while for Japan the results did not provide support for the theorem. Further evaluation of the Heckscher-Ohlin theorem was conducted with tests for Australia, Ireland, Israel, Japan, Kenya, Korea, New Zealand, United Kingdom, and the United States. The nine countries involved in the study provide a cross-section of those in the world. Australia, Ireland, Japan, New Zealand, United Kingdom and the United States are considered to be industrialized nations.
Developing countries can be classified by income group. Israel is in the higher income category with Korea and Kenya classified in the middle and lower groups, respectively. Although trade flows have been traditionally evaluated in terms of their capital and labor content, the developed model provided testable hypotheses for balanced and unbalanced trade in terms of the profit and usage content of trade. The results of the analysis showed that the 1968 trade patterns for Australia, Ireland, Japan, Korea, New Zealand and the United States provided support for the Heckscher-Ohlin theorem while the trade patterns for Israel, Kenya and the United Kingdom did not.
In conclusion, the critique of previous empirical work as well as the empirical findings from this study would suggest that the weight of the empirical evidence would lend support to the simple two-factor version of the Heckscher-Ohlin theorem, that is, the cause of international trade can be primarily contributed to the difference in capital and labor endowments between countries.
- Notes:
-
- (UnM)AAI8019202
- Source: Dissertation Abstracts International, Volume: 41-03, Section: A, page: 1163.
- Thesis (Ph.D.)--Georgia State University, 1980.
- Reproduction:
- Microfiche. Ann Arbor, Mich.: University Microfilms International.
- Subject:
- Economics, Theory
- Other authors/contributors:
- Georgia State University
- Copyright:
-
In Copyright
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Copyright status was determined using the following information:
- Material type:
- Literary Dramatic Musical
- Published status:
- Unpublished
- Creation date:
- 1980
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