Validity of Heckscher-Ohlin-Vanek Hypothesis = A Complete and Partial Test Approach

다국어 초록 (Multilingual Abstract)

The paper uses partial and complete tests to confirm the validity of the Heckscher-Ohlin-Vanek hypothesis (H-O-V). H-O-V hypothesis relates factor abundance and scarcity to the factor content of net trade. Partial test is performed using India’s industry level data from the year 1989-2008. The results reveal that India is abundant in unskilled labour and capital and it is scarce in skilled labour, energy and services as an input in manufacturing sector. Further, a complete test is performed by considering five factors of production, such as primary educated labour force, labour force with secondary and tertiary education, capital and arable land and a set of ten important industries such as mineral, chemical, plastics and rubber, leather, wood, textile, stone/glass, metal, machinery and transportation industries for the year 2009. The complete test is a test of the modified H-O-V theorem which defines abundance and scarcity of factors using excess supply approach. The results justify the H-O-V theorem in more than 50% of the cases. This supports the immense importance of factors and their productivity differentials in explaining India’s trade with its trading partners.

목차 (Table of Contents)

• 1. INTRODUCTION
• 2. H-O-V (1968) MODEL AND EMPIRICAL LITERATURE
• 3. PARTIAL TEST OF H-O-V THEOREM
• 4. COMPLETE TEST OF H-O-V THEOREM
• 5. CONCLUDING REMARKS
• REFERENCES

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