Factor Content of Trade

Donald R. Davis · David E. Weinstein

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Global trade and economics Economic Theory and Policy Global Trade and Competitiveness

Abstract

International trade is the cross-border exchange of goods (and services), both final and intermediate. These goods are produced with factors of production located in specific countries, hence the trade in these goods is implicitly also trade in the services of the factors used to produce them. This converts the standard HeckscherOhlin model of trade in goods into the HeckscherOhlin- Vanek (HOV) model of the factor content of trade.

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References

1995The Case of the Missing Trade and Other Mysteries 1993International Factor Price Differences: Leontief was Right!2001An Account of Global Factor Trade 1968THE FACTOR PROPORTIONS THEORY: THE N?FACTOR CASE 1984The Factor Content of Foreign Trade 2000Aggregation Bias in the Factor Content of Trade: Evidence from U.S. Manufacturing 2005Global production sharing and trade in the services of factors 2004The Factor Content of Bilateral Trade: An Empirical Test

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2011International Trade and Volume Patterns under Quasilinear Preferences 2010On the Dynamics of the Hecksher-Ohlin Theory

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