International Factor Price Differences: Leontief was Right!
1993; University of Chicago Press; Volume: 101; Issue: 6 Linguagem: Inglês
10.1086/261911
ISSN1537-534X
Autores Tópico(s)Economic Growth and Productivity
ResumoThe factor price equalization hypothesis is widely at odds with the large variation in factor prices across countries. Similarly, the Heckscher-Ohlin-Vanek (HOV) theorem constitutes an incomplete description of trade in factor services: its predictions are always rejected empirically. These two issues are examined using a modification of the HOV model that allows for factor-augmenting international productivity differences. The empirical results are stark: this simple modification of the HOV theorem explains much of the factor content of trade and the cross-country variation in factor prices.
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