Factor Endowment, the Choice of Technology, and the Volume of Trade
Year: 2007
Type: article
Abstract: This paper studies impacts of factor endowment on international trade in a general equilibrium model in which firms choose their technologies endogenously. Although countries only differ in factor endowment ex ante, countries may also differ in their chosen technologies. If industries choose different capital-labor intensities in equilibrium, the Heckscher–Ohlin theorem, factor price equalization theorem, the Rybczynski theorem, and the Stolper–Samuelson theorem hold. If industries choose the same capital-labor intensity in equilibrium, the volume of trade is zero. None of the four theorems applies.
Source: International Economic Journal
Author: Haiwen Zhou
Institution: Old Dominion University
Language: English
Topic: Global trade and economics
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W2587309133