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How Robust Are Sign and Rank Order Tests of the Heckscher-Ohlin-Vanek Theorem?

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  • Kohler, Wilhelm

Abstract

This paper draws attention to a widely neglected problem of arbitrariness with empirical tests of rank order and sign propositions derived from the Heckscher-Ohlin-Vanek (HOV) model of the factor content of international trade. The paper concentrates on four different rank order and two different sign propositions of the HOV model, which have all been the subject of empirical analysis in the literature, and it establishes conditions, under which a given data set will support one (rank order or sign) hypothesis while at the same time rejecting another. This will shed some light on the circumstances influencing the likelihood of such non-robust test results. The paper also examines the empirical relevance of this phenomenon of non-robustness using the multi-country data set published in Bowen, Leamer and Sveikauskas (1987). Copyright 1991 by Royal Economic Society.

Suggested Citation

  • Kohler, Wilhelm, 1991. "How Robust Are Sign and Rank Order Tests of the Heckscher-Ohlin-Vanek Theorem?," Oxford Economic Papers, Oxford University Press, vol. 43(1), pages 158-171, January.
  • Handle: RePEc:oup:oxecpp:v:43:y:1991:i:1:p:158-71
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    Cited by:

    1. Kiyota, Kozo, 2005. "Services content of Japanese trade," Japan and the World Economy, Elsevier, vol. 17(3), pages 261-292, August.
    2. Debeare, Peter, 2003. "Relative Factor Abundance and Trade," Journal of Political Economy, University of Chicago Press, vol. 111(3), pages 589-610, June.
    3. Lundmark, Robert, 2010. "European trade in forest products and fuels," Journal of Forest Economics, Elsevier, vol. 16(3), pages 235-251, August.
    4. Berislav ZMUK, 2021. "Investigating the impact of GDP and distance variables in the gravity model using sign and rank tests," Eastern Journal of European Studies, Centre for European Studies, Alexandru Ioan Cuza University, vol. 12, pages 5-30, June.
    5. Ahmet M. Çilingirtürk & Habip Koçak, 2018. "Human Development Index (HDI) Rank-Order Variability," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 137(2), pages 481-504, June.
    6. Manuel Cabral & Rod Falvey & Chris Milner, 2009. "Does Skill Content Explain Total Trade and Intra‐Industry Trade?," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 71(5), pages 601-619, October.

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