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Heckscher-Ohlin Theory when Countries have Different Technologies

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  • Eric O'N. Fisher
Abstract
Rethinking the foundations of Heckscher-Ohlin theory when countries have different technologies, this paper shows how to make the proper adjustments for international productivity differences. The central tool is a factor conversion matrix that computes the local factor content of foreign Rybczynski effects. Factor-specific productivities are a special case of these more general linear relationships.

Suggested Citation

  • Eric O'N. Fisher, 2010. "Heckscher-Ohlin Theory when Countries have Different Technologies," CESifo Working Paper Series 3118, CESifo.
    • Handle: RePEc:ces:ceswps:_3118
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    References listed on IDEAS

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    1. Keith E. Maskus & Shuichiro Nishioka, 2009. "Development‐related biases in factor productivities and the HOV model of trade," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 42(2), pages 519-553, May.
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    8. Peter K. Schott, 2004. "Across-Product Versus Within-Product Specialization in International Trade," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 119(2), pages 647-678.
    9. 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.
    10. Hallak, Juan Carlos, 2006. "Product quality and the direction of trade," Journal of International Economics, Elsevier, vol. 68(1), pages 238-265, January.
    11. Helpman, Elhanan, 1984. "The Factor Content of Foreign Trade," Economic Journal, Royal Economic Society, vol. 94(373), pages 84-94, March.
    12. Brecher, Richard A. & Choudhri, Ehsan U., 1982. "The factor content of international trade without factor-price equalization," Journal of International Economics, Elsevier, vol. 12(3-4), pages 277-283, May.
    13. Bernhofen, Daniel M., 2009. "Multiple cones, factor price differences and the factor content of trade," Journal of International Economics, Elsevier, vol. 79(2), pages 266-271, November.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Tadashi Ito & Lorenzo Rotunno & Pierre-Louis Vézina, 2017. "Heckscher–Ohlin: Evidence from Virtual Trade in Value Added," Review of International Economics, Wiley Blackwell, vol. 25(3), pages 427-446, August.
    2. 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.
    3. 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.
    4. Chen, Yu-Fu & Funke, Michael, 2010. "Global Warming And Extreme Events: Rethinking The Timing And Intensity Of Environmental Policy," SIRE Discussion Papers 2010-48, Scottish Institute for Research in Economics (SIRE).
    5. 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.
    6. Guo, Baoping, 2021. "The Stolper-Samuelson Trade Effects Trigger the Rybczynski Trade Effects Negatively," MPRA Paper 113674, University Library of Munich, Germany, revised Jul 2022.
    7. Egger, Peter & Marshall, Kathryn G. & Fisher, Eric O'N., 2011. "Empirical foundations for the resurrection of Heckscher-Ohlin theory," International Review of Economics & Finance, Elsevier, vol. 20(2), pages 146-156, April.
    8. 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.
    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. 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.
    11. 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.

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    More about this item

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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