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...

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...

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 goal of this research is to test the Heckscher-Ohlin' theorem of comparative advantages on the sample of the Republic of Croatia and other European Union member countries. Heckscher-Ohlin theorem of comparative advantages can largely explain international trade in cases where the sample of...

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...

The growth in the trade share of output is one of the most important features of the world economy since World War II. The growth is generally thought to have been generated by falling tariff barriers worldwide. This thinking, however, does not square with standard static and dynamic...

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...

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...