IDEAS home Printed from https://ideas.repec.org/a/kap/openec/v10y1999i4p385-393.html
   My bibliography  Save this article

Definitions of Factor Abundance and the Factor Content of Trade

Author

Listed:
  • Henry Thompson

Abstract

This paper points out that the different definitions of factor abundance in the empirical trade literature are weaker than in the Heckscher-Ohlin model, which compares endowments of two factors across two countries. These different definitions in practice lead to different factor abundance rankings when there are three or more countries or factors. A lack of correlation between a weak measure of factor abundance and the factor content of trade provides no ground to claim that factor proportions trade theory fails. A working definition of factor abundance more in line with the traditional one is proposed. Copyright Kluwer Academic Publishers 1999

Suggested Citation

  • Henry Thompson, 1999. "Definitions of Factor Abundance and the Factor Content of Trade," Open Economies Review, Springer, vol. 10(4), pages 385-393, October.
    • Handle: RePEc:kap:openec:v:10:y:1999:i:4:p:385-393
    DOI: 10.1023/A:1008333714210
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1023/A:1008333714210
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1023/A:1008333714210?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Davis, Donald R. & David E. Weinstein & Scott C. Bradford & Kazushige Shimpo, 1997. "Using International and Japanese Regional Data to Determine When the Factor Abundance Theory of Trade Works," American Economic Review, American Economic Association, vol. 87(3), pages 421-446, June.
    2. Harkness, Jon P, 1983. "The Factor-Proportions Model with Many Nations, Goods and Factors: Theory and Evidence," The Review of Economics and Statistics, MIT Press, vol. 65(2), pages 298-305, May.
    3. 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.
    4. R. W. Jones, 1956. "Factor Proportions and the Heckscher-Ohlin Theorem," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 24(1), pages 1-10.
    5. Trefler, Daniel, 1993. "International Factor Price Differences: Leontief Was Right!," Journal of Political Economy, University of Chicago Press, vol. 101(6), pages 961-987, December.
    6. Trefler, Daniel, 1995. "The Case of the Missing Trade and Other Mysteries," American Economic Review, American Economic Association, vol. 85(5), pages 1029-1046, December.
    7. Henry Thompson, 1985. "Complementarity in a Simple General Equilibrium Production Model," Canadian Journal of Economics, Canadian Economics Association, vol. 18(3), pages 616-621, August.
    8. Maskus, Keith E., 1985. "A test of the Heckscher-Ohlin-Vanek theorem: The Leontief commonplace," Journal of International Economics, Elsevier, vol. 19(3-4), pages 201-212, November.
    9. Leamer, Edward E, 1974. "The Commodity Composition of International Trade in Manufactures: An Empirical Analysis," Oxford Economic Papers, Oxford University Press, vol. 26(3), pages 350-374, November.
    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. Kang, Myeongjoo & Malki, Mostafa & Rassekh, Farhad & Thompson, Henry, 2007. "Empirical factor abundance with many factors and countries," International Review of Economics & Finance, Elsevier, vol. 16(2), pages 287-299.
    2. Farhad Rassekh & Henry Thompson, 2002. "Measuring Factor Abundance Across Many Factors and Countries," Open Economies Review, Springer, vol. 13(3), pages 237-249, July.
    3. Dasgupta, Indro & Osang, Thomas, 2002. "Globalization and relative wages: further evidence from U.S. manufacturing industries," International Review of Economics & Finance, Elsevier, vol. 11(1), pages 1-16, April.

    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. Assaf Zimring, 2019. "Testing the Heckscher–Ohlin–Vanek theory with a natural experiment," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 52(1), pages 58-92, February.
    2. Elhanan Helpman, 1999. "The Structure of Foreign Trade," Journal of Economic Perspectives, American Economic Association, vol. 13(2), pages 121-144, Spring.
    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. Daniel Bernhofen, 2010. "The Empirics of General Equilibrium Tade Theory: What Have we Learned?," CESifo Working Paper Series 3242, CESifo.
    5. Bernstein, Jeffrey R. & Weinstein, David E., 2002. "Do endowments predict the location of production?: Evidence from national and international data," Journal of International Economics, Elsevier, vol. 56(1), pages 55-76, January.
    6. Yun‐kwong Kwok, 2006. "Global factor trade with differentiated factor prices and factor intensities," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 39(3), pages 758-780, August.
    7. Artal-Tur, Andrés & Castillo-Giménez, Juana & Llano-Verduras, Carlos & Requena-Silvente, Francisco, 2011. "The factor content of regional bilateral trade: The role of technology and demand," International Review of Economics & Finance, Elsevier, vol. 20(2), pages 157-172, April.
    8. Keith E. Maskus & Shuichiro Nishioka, 2009. "Development-related biases in factor productivities and the HOV model of trade," Canadian Journal of Economics, Canadian Economics Association, vol. 42(2), pages 519-553, May.
    9. Donald R. Davis & David E. Weinstein, 2001. "Do Factor Endowments Matter for North-North Trade?," NBER Working Papers 8516, National Bureau of Economic Research, Inc.
    10. Andrés Artal‐Tur & Carlos Llano‐Verduras & Francisco Requena‐Silvente, 2010. "Factor productivity differences and missing trade problems in a regional HOV model," Papers in Regional Science, Wiley Blackwell, vol. 89(4), pages 759-776, November.
    11. Donald R. Davis & David E. Weinstein, 2002. "What Role for Empirics in International Trade?," Aussenwirtschaft, University of St. Gallen, School of Economics and Political Science, Swiss Institute for International Economics and Applied Economics Research, vol. 57(04), pages 441-468, December.
    12. Thijs ten Raa & Pierre Mohnen, 2009. "The Location of Comparative Advantages on the Basis of Fundamentals Only," World Scientific Book Chapters, in: Input–Output Economics: Theory And Applications Featuring Asian Economies, chapter 23, pages 425-446, World Scientific Publishing Co. Pte. Ltd..
    13. Kagawa, Shigemi, 2008. "How does Japanese compliance with the Kyoto Protocol affect environmental productivity in China and Japan?," Structural Change and Economic Dynamics, Elsevier, vol. 19(2), pages 173-188, June.
    14. Benjamin F. Jones, 2008. "The Knowledge Trap: Human Capital and Development Reconsidered," NBER Working Papers 14138, National Bureau of Economic Research, Inc.
    15. Assaf Zimring, 2015. "Testing the Heckscher-Ohlin-Vanek Theory with a Natural Experiment," Working Papers 642, Research Seminar in International Economics, University of Michigan.
    16. Fitzgerald, Doireann & Hallak, Juan Carlos, 2004. "Specialization, factor accumulation and development," Journal of International Economics, Elsevier, vol. 64(2), pages 277-302, December.
    17. Peter M. Morrow, 2008. "East is East and West is West: A Ricardian-Heckscher-Ohlin Model of Comparative Advantage," Working Papers 575, Research Seminar in International Economics, University of Michigan.
    18. Donald R. Davis & David E. Weinstein, 2001. "The Factor Content of Trade," NBER Working Papers 8637, National Bureau of Economic Research, Inc.
    19. Jäkel, Ina C. & Smolka, Marcel, 2017. "Trade policy preferences and factor abundance," Journal of International Economics, Elsevier, vol. 106(C), pages 1-19.
    20. Chandrima Sikdar & Thijs ten Raa & Pierre Mohnen & Debesh Chakraborty, 2009. "Bilateral Trade between India and Bangladesh: A General Equilibrium Approach," World Scientific Book Chapters, in: Input–Output Economics: Theory And Applications Featuring Asian Economies, chapter 25, pages 487-518, World Scientific Publishing Co. Pte. Ltd..

    More about this item

    Keywords

    factor abundance; factor content;

    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:kap:openec:v:10:y:1999:i:4:p:385-393. 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: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    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.