Using OECD input output matrices consistently, we offer a tentative solution to the mystery of missing trade. First, we confirm the usual rejection of factor price equalization and identical technologies. Second, we develop a new technique to compute the factor content of trade when countries'...

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...

This paper constructs a theoretical model to illustrate the inherent dynamics between the trade imbalance and the comparative advantage of factor endowment structure under a two-country setting (South vs North). Our model shows that the shift of comparative advantage of factor endowment...

The neoclassical trade model is characterized by production frontiers, utility maximization, and offer curves in general functional form with general expenditure and revenue functions. The factor proportions Heckscher-Ohlin trade model is based on the comparative static analysis of production...

We show that in the case of multiple goods and factors, the factor proportions theory has the following prediction: across industries, the impacts of the endowment of a given factor on industry outputs have positive co-variance with the relative uses of this factor. The intuition is that on...

This paper presents a drastically different approach to testing the Heckscher-Ohlin Theorem (HO Theorem) of factor endowment theory by explicitly recognizing the underlying assumptions of the theory and designing a testing strategy that is capable of controlling most of the influencing forces...

This research paper presents a new way to visualize and analyze the Heckscher–Ohlin model from a multidimensional perspective graphically. The main idea is to evaluate infinite α-relative commodity prices between n-nations to observe their comparative advantage and different β-levels of...

The core subjects of trade theory are the pattern and volume of trade: which goods are traded by which countries, and how much of those goods are traded. The first part of this paper discusses evidence on comparative advantage, with an emphasis on carefully connecting theoretical models with...

Recent trade negotiations, both at the regional and multilateral level, have seen a resurgence of the issue of trade and labour standards. As the world economy becomes increasingly globalised and the volume of world trade flows keeps increasing between the North and the South, it is very likely...