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Title: Getting things in proportion : essays on the development and application of Heckscher-Ohlin trade theory
Author: Aldaz-Carroll, Enrique.
ISNI:       0000 0001 3410 3022
Awarding Body: University of Sussex
Current Institution: University of Sussex
Date of Award: 2003
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This thesis develops and applies a new variant of the Heckscher-Ohlin (HO) trade theory, whose novel feature is that it relates proportional differences in the composition of exports to proportional differences in the composition of factor endowments. The thesis is divided into three essays. The first develops the theoretical basis for a HO model based on proportional differences. This specification was found by Wood and Berge (1997) to fit the data well, but its theoretical underpinnings have not previously been explored. The model, named HO-Wood (HOW), is based on more plausible assumptions than the HO-Vanek (HOV) model: two-way trade in each sector, factorprice- non-equalisation, sectorally-neutral technological differences across countries, and imperfect substitution between foreign and domestic goods. These features are incorporated through constant elasticity export and import share functions, of the sort used in CGE models. The second essay takes empirical work on trade one step further by testing this new model against the HOV and HO-Learner (1995) [HOL] models in a search for the best performing one. The models are tested using different numbers of goods and factors. Seven performance criteria are employed: economic sense, explanatory power, predictive power, robustness, specification test, plausibility of assumptions, and normality and functional form tests. The results suggest that HOW usually outperforms the HOV and HOL models, It is also simpler to apply than the HOL alternative to HOV. The third essay uses the HOW model to examine the relationship between Latin American and Caribbean (LAC) countries' export and factor compositions between 1988 and 2000. This relationship is found to have become closer over time as a result of trade policy liberalisation. LAC's specialisation in primary products is largely explained by its high ratio of land to labour endowments, coupled with its low share of professional workers and low capital per worker
Supervisor: Not available Sponsor: Not available
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID:  DOI: Not available
Keywords: Economics & economic theory