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On Trade Gains and International Disparities in Factor Proportions

In: International Trade and Economic Dynamics

Author

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  • Murray C. Kemp

    (Atax, University of New South Wales)

  • Tran-Nam Binh

    (University of New South Wales)

Abstract

It has been suggested that the greater are the international differences in relative factor endowments, the larger are the gains from international trade. The proposition is interesting from a policy-making point of view; for, if it were known to be valid under plausible circumstances, it would provide guidance to any country contemplating reciprocal preferential trading with other countries. However, the proposition has not been accompanied by supporting argument. In the present note, we therefore focus on a conventional Heckscher-Ohlin world economy and derive necessary and sufficient conditions for the validity of a strict version of the proposition.

Suggested Citation

  • Murray C. Kemp & Tran-Nam Binh, 2009. "On Trade Gains and International Disparities in Factor Proportions," Springer Books, in: Takashi Kamihigashi & Laixun Zhao (ed.), International Trade and Economic Dynamics, pages 13-18, Springer.
    • Handle: RePEc:spr:sprchp:978-3-540-78676-4_4
    DOI: 10.1007/978-3-540-78676-4_4
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