Article ID Journal Published Year Pages File Type
962415 Journal of International Economics 2009 6 Pages PDF
Abstract
This paper examines the theoretical predictions of the multi-cone Heckscher-Ohlin model and the empirical evidence for it. I extend Helpman (1984)by identifying additional restrictions that characterize the free trade equilibrium. I illustrate that the complete set of restrictions are the building blocks of a multi-cone factor content specification which is the factor content dual to Alan Deardorff's (1979)well-known chain of comparative advantage goods prediction. The theoretical analysis implies that the existing tests of Helpman are incomplete. Applying the complete set of restrictions to Choi and Krishna's data set of 8 OECD countries, I find limited empirical support. This is compatible with previous studies suggesting that OECD countries do not occupy different cones.
Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
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