The Heckscher-Ohlin theory and factor intensity reversal

Reza Barazesh, Fordham University

Abstract

Most major empirical investigations of the Heckscher-Ohlin theorem have concentrated on the determinants of trade for only a particular year, rather than over a long enough period of time to detect any of the structural changes which may have occurred.^ In this dissertation, we empirically examine the determinants of the structure of foreign trade over the period 1958-1981. Our analyses are based on the factor-content version of the Heckscher-Ohlin model, using both Leontief-type calculations based upon input-output data and regression analysis. Most of the data were collected from the Department of Commerce, Bureau of Economic Analysis and the Bureau of Labor Statistics.^ Both the Leontief-type calculations and the regression analysis show evidence of the Leontief paradox when all sixty-four industries were used in the calculations. The Leontief paradox was absent when the natural resources industries were excluded from the calculations. It appears that the application of two factor (capital and labor) factor-proportions model along Heckscher-Ohlin lines is inadequate for an understanding of U.S. trade over a longer period of time. ^

Subject Area

Economic theory

Recommended Citation

Barazesh, Reza, "The Heckscher-Ohlin theory and factor intensity reversal" (1988). ETD Collection for Fordham University. AAI8809462.
http://fordham.bepress.com/dissertations/AAI8809462

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