DifFerences in Efficiency Among Industries in Developing Countries

Abstract

One persistent question which comes up in the literature on international trade concerns the Heckscher-Ohlin theorem and the discussion surrounding comparative advantage and differences in relative factor endowments. Much of the discussion stems from the Leontief paradox and the large number of papers offered in explanation of the apparent contradiction to the general equilibrium explanation of differences in comparative costs among countries.1 Among these it has been correctly re-emphasized [6] that in reality relative prices may be influenced by conditions other than factor proportions. In particular, differences in relative efficiency

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