[go: up one dir, main page]

IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/96929.html
   My bibliography  Save this paper

Leontief Paradox Explored A New Trade Pattern When Countries Have Different Technologies

Author

Listed:
  • Guo, Baoping
Abstract
The trade pattern can be counted as the number one topic for international economics. Based either on the concept of Trefler’s effective factor endowments (Trfler, 1993) or on the concept of Fisher and Marshall’s virtual factor endowments (Fisher and Marshall, 2008), the trade pattern described by Leontief tests is right. This paper demonstrates that there are three trade patterns: the Heckscher-Ohlin trade, the Leontief trade, and the factor conversion trade (or one-side Leontief trade) when countries have different technologies. Methodologically, the popular sign predictions in empirical studies include both the Leontief trade and the Heckscher-Ohlin trade. Therefore, the sign predictions’ results cannot be used to reject the Leontief paradox. The factor conversion trade occurs when a model is with the existence of factor intensity reversals (FIRs). Many studies have demonstrated evidence of the factor intensity reversals (FIRs). They mean the Leontief trade. Another new finding is that the Leontief trade can occur when FIRs do not present.

Suggested Citation

  • Guo, Baoping, 2015. "Leontief Paradox Explored A New Trade Pattern When Countries Have Different Technologies," MPRA Paper 96929, University Library of Munich, Germany, revised Nov 2019.
  • Handle: RePEc:pra:mprapa:96929
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/96929/1/MPRA_paper_96929.pdf
    File Function: original version
    Download Restriction: no

    File URL: https://mpra.ub.uni-muenchen.de/108166/1/MPRA_paper_108166.pdf
    File Function: revised version
    Download Restriction: no

    File URL: https://mpra.ub.uni-muenchen.de/112433/8/MPRA_paper_112433.pdf
    File Function: revised version
    Download Restriction: no

    File URL: https://mpra.ub.uni-muenchen.de/113003/1/MPRA_paper_113003.pdf
    File Function: revised version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Daniel Bernhofen & Rod Falvey & David Greenaway & Udo Kreickemeier (ed.), 2013. "Palgrave Handbook of International Trade," Palgrave Macmillan Books, Palgrave Macmillan, number 978-0-230-30531-1, October.
    2. Leamer, Edward E, 1980. "The Leontief Paradox, Reconsidered," Journal of Political Economy, University of Chicago Press, vol. 88(3), pages 495-503, June.
    3. Romney Robinson, 1956. "Factor Proportions and Comparative Advantage: Part II," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(3), pages 346-363.
    4. 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.
    5. Helpman, Elhanan, 1984. "The Factor Content of Foreign Trade," Economic Journal, Royal Economic Society, vol. 94(373), pages 84-94, March.
    6. David E. Weinstein & Donald R. Davis, 2000. "International Trade as an "Integrated Equilibrium": New Perspectives," American Economic Review, American Economic Association, vol. 90(2), pages 150-154, May.
    7. Fisher, Eric O'N., 2011. "Heckscher-Ohlin theory when countries have different technologies," International Review of Economics & Finance, Elsevier, vol. 20(2), pages 202-210, April.
    8. Eric O’N. Fisher & Kathryn G. Marshall, 2016. "Leontief was not right after all," Journal of Productivity Analysis, Springer, vol. 46(1), pages 15-24, August.
    9. Sampson, Thomas, 2016. "Assignment reversals: Trade, skill allocation and wage inequality," Journal of Economic Theory, Elsevier, vol. 163(C), pages 365-409.
    10. Alan Woodland, 2013. "General Equilibrium Trade Theory," Palgrave Macmillan Books, in: Daniel Bernhofen & Rod Falvey & David Greenaway & Udo Kreickemeier (ed.), Palgrave Handbook of International Trade, chapter 3, pages 39-87, Palgrave Macmillan.
    11. 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.
    12. Krugman, Paul R., 2000. "Technology, trade and factor prices," Journal of International Economics, Elsevier, vol. 50(1), pages 51-71, February.
    13. 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.
    14. Takahashi, Harutaka, 2004. "The capital-intensity reversal in the postwar Japanese economy: Why did Japan grow so fast during 1955-1975?," MPRA Paper 24861, University Library of Munich, Germany, revised Feb 2008.
    15. Romney Robinson, 1956. "Factor Proportions and Comparative Advantage: Part I," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(2), pages 169-192.
    16. Guo, Baoping, 2019. "The Simplest Factor Price Non-Equalization When Countries Have Different Productivities," MPRA Paper 95015, University Library of Munich, Germany, revised 12 Jul 2019.
    17. 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.
    18. Bagicha S. Minhas, 1962. "The Homohypallagic Production Function, Factor-Intensity Reversals, and the Heckscher-Ohlin Theorem," Journal of Political Economy, University of Chicago Press, vol. 70(2), pages 138-138.
    19. Avinash Dixit, 2012. "Paul Samuelson's Legacy," Annual Review of Economics, Annual Reviews, vol. 4(1), pages 1-31, July.
    Full references (including those not matched with items on IDEAS)

    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. Guo, Baoping, 2015. "Heckscher-Ohlin Trade, Leontief Trade, and Factor Conversion Trade When Countries Have Different Technologies," MPRA Paper 95161, University Library of Munich, Germany, revised Jul 2019.
    2. Baoping Guo, 2024. "Leontief Paradox vs. Leontief Trade and Localized Factor Prices vs. Localized Trade Patterns," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 30(1), pages 83-105, February.
    3. Guo, Baoping, 2019. "The Simplest Factor Price Non-Equalization When Countries Have Different Productivities," MPRA Paper 95015, University Library of Munich, Germany, revised 12 Jul 2019.
    4. Donald R. Davis & David E. Weinstein, 2001. "The Factor Content of Trade," NBER Working Papers 8637, National Bureau of Economic Research, Inc.
    5. Haiwen Zhou, 2007. "Factor Endowment, the Choice of Technology, and the Volume of Trade," International Economic Journal, Taylor & Francis Journals, vol. 21(4), pages 593-611.
    6. 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.
    7. Elhanan Helpman, 1999. "The Structure of Foreign Trade," Journal of Economic Perspectives, American Economic Association, vol. 13(2), pages 121-144, Spring.
    8. Daniel Bernhofen, 2010. "The Empirics of General Equilibrium Tade Theory: What Have we Learned?," CESifo Working Paper Series 3242, CESifo.
    9. Guo, Baoping, 2019. "World Equivalent Factor Endowments Determine Local Factor Rewards When Countries Have Different Productivities," MPRA Paper 94004, University Library of Munich, Germany.
    10. Ciaian, Pavel & Kancs, d'Artis & Pokrivcak, Jan, 2011. "Comparative Advantages, Transaction Costs and Factor Content in Agricultural Trade: Empirical Evidence from the CEE - Vantaggi comparati, costi di transazione e contenuto dei fattori nel commercio agr," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 64(1), pages 67-101.
    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. 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.
    13. Trefler, Daniel & Zhu, Susan Chun, 2010. "The structure of factor content predictions," Journal of International Economics, Elsevier, vol. 82(2), pages 195-207, November.
    14. Lai, Huiwen & Zhu, Susan Chun, 2007. "Technology, endowments, and the factor content of bilateral trade," Journal of International Economics, Elsevier, vol. 71(2), pages 389-409, April.
    15. 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.
    16. Reimer, Jeffrey J., 2006. "Global production sharing and trade in the services of factors," Journal of International Economics, Elsevier, vol. 68(2), pages 384-408, March.
    17. Crozet, Matthieu & Trionfetti, Federico, 2011. "Comparative Advantage and Within-Industry Firms Performance," CEPREMAP Working Papers (Docweb) 1101, CEPREMAP.
    18. Clément Nedoncelle, 2016. "Trade Costs and Current Accounts," The World Economy, Wiley Blackwell, vol. 39(10), pages 1653-1672, October.
    19. Koebel, Bertrand M. & Levet, Anne-Laure & Nguyen-Van, Phu & Purohoo, Indradev & Guinard, Ludovic, 2016. "Productivity, resource endowment and trade performance of the wood product sector," Journal of Forest Economics, Elsevier, vol. 22(C), pages 24-35.
    20. Baoping Guo, 2023. "Integrated Price-Trade Equilibrium by World Factor Endowments," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 29(3), pages 193-205, August.

    More about this item

    Keywords

    Heckscher-Ohlin-Ricardo model; Heckscher-Ohlin Trade; Leontief Trade; and Conversion Trade; factor content of trade; Leontief Paradox.;
    All these keywords.

    JEL classification:

    • A2 - General Economics and Teaching - - Economic Education and Teaching of Economics
    • F1 - International Economics - - Trade
    • F10 - International Economics - - Trade - - - General
    • F15 - International Economics - - Trade - - - Economic Integration

    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:pra:mprapa:96929. 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: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    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.