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Global factor trade with differentiated factor prices and factor intensities

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  • Yun‐kwong Kwok

Abstract

Relaxing the assumption of internationally identical factor intensity techniques in the HOV model creates two challenges. First, computing actual factor intensity techniques of different countries requires detailed input‐output tables and factor usage data, which are not always available. Second, determinants of the factor intensity technique differences across countries need to be identified. This paper explores the role of relative factor price differences in the determination of factor intensity technique differences across countries and proposes an inferring method that infers factor intensity techniques of different countries based on relative factor price differences. The HOV model is then modified accordingly. Relaxer le postulat de techniques à intensité identique de facteurs de production d'un pays à l'autre dans un modèle Heckscher‐Ohlin‐Vanek (HOV) pose deux défis. D'abord, mesurer les intensités en facteurs des techniques en place dans les divers pays réclame des tableaux interindustriels détaillés et des données sur l'utilisation des facteurs qui ne sont pas toujours disponibles. Ensuite, il faut identifier les déterminants des différences d'intensités en facteurs des techniques d'un pays à l'autre. Ce mémoire explore le rôle des différences dans les prix relatifs des facteurs dans la détermination des différences d'intensité en facteurs d'un pays à l'autre, et propose une méthode qui permet d'inférer les différences d'intensité en facteurs des techniques des divers pays à partir des différences dans les prix relatifs des facteurs. Le modèle HOV est alors modifié en conséquence.

Suggested Citation

  • 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.
    • Handle: RePEc:wly:canjec:v:39:y:2006:i:3:p:758-780
    DOI: 10.1111/j.1540-5982.2006.00368.x
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    References listed on IDEAS

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