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Global Factor Trade with Differentiated Factor Prices and Factor Intensities

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  • Yun-kwong Kwok
Abstract
The assumption of internationally identical factor intensity techniques may be one of the major causes of the HOV model's poor performance. To relax this assumption, detailed input-output data are required to compute the factor intensity techniques used in different countries; however, these data are not readily accessible for many countries. This paper takes an alternative approach by introducing an inferring method that can infer the factor intensity techniques of different countries based on our knowledge about the US factor intensity techniques and the international factor price differences. The original HOV model is then modified accordingly

Suggested Citation

  • Yun-kwong Kwok, 2004. "Global Factor Trade with Differentiated Factor Prices and Factor Intensities," Econometric Society 2004 Australasian Meetings 259, Econometric Society.
    • Handle: RePEc:ecm:ausm04:259
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    References listed on IDEAS

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    1. Hakura, Dalia S., 2001. "Why does HOV fail?: The role of technological differences within the EC," Journal of International Economics, Elsevier, vol. 54(2), pages 361-382, August.
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    3. Davis, Donald R. & David E. Weinstein & Scott C. Bradford & Kazushige Shimpo, 1997. "Using International and Japanese Regional Data to Determine When the Factor Abundance Theory of Trade Works," American Economic Review, American Economic Association, vol. 87(3), pages 421-446, June.
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    5. 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.
    6. Antoni Estevadeordal & Alan M. Taylor, 2002. "A Century of Missing Trade?," American Economic Review, American Economic Association, vol. 92(1), pages 383-393, March.
    7. 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.
    8. Bowen, Harry P & Leamer, Edward E & Sveikauskas, Leo, 1987. "Multicountry, Multifactor Tests of the Factor Abundance Theory," American Economic Review, American Economic Association, vol. 77(5), pages 791-809, December.
    9. Richard B. Freeman & Remco H. Oostendorp, 2002. "Wages Around the World: Pay across Occupations and Countries," International Economic Association Series, in: Richard B. Freeman (ed.), Inequality Around the World, chapter 2, pages 5-37, Palgrave Macmillan.
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    Cited by:

    1. Demmou Lilas, 2009. "Déterminants et nature des spécialisations Nord-Sud : quelques enseignements tirés de la littérature empirique," Revue d'économie politique, Dalloz, vol. 119(1), pages 71-94.

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    More about this item

    Keywords

    Heckscher-Ohlin-Vanek (HOV); factor content of trade;

    JEL classification:

    • F1 - International Economics - - Trade
    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • D2 - Microeconomics - - Production and Organizations
    • D5 - Microeconomics - - General Equilibrium and Disequilibrium

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