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1、InternationalEconomicsTenthEditionFactorEndowmentsandtheHeckscher-OhlinTheoryDominickSalvatoreJohnWiley&Sons,Inc.CHAPTERFIVE5Salvatore:InternationalEconomics,10thEdition©2009JohnWiley&Sons,Inc.Inthischapter:IntroductionAssumptionsoftheTheoryFactorIntensity,FactorAbundance,a
2、ndtheShapeoftheProductionFrontierFactorEndowmentsandtheHeckscher-OhlinTheoryFactor-PriceEqualizationandIncomeDistributionEmpiricalTestsoftheHeckscher-OhlinModelIntroductionExtendingtrademodeltoinclude:BasisofcomparativeadvantageEffectofinternationaltradeonreturntolaborAssum
3、ptionsoftheTheoryHeckscher-Ohlintheorybasedonfollowingassumptions:Twonations,twogoods,twofactorsofproductionTechnologysameinbothnationsCommodityXislaborintensive,commodityYiscapitalintensiveinbothnationsConstantreturnstoscaleforXandYinbothnationsIncompletespecializationinpr
4、oductioninbothnationsAssumptionsoftheTheoryHeckscher-Ohlintheorybasedonfollowingassumptions:TastesareequalinbothnationsBothcommoditiesandfactorsaretradedinperfectlycompetitivemarketsPerfectfactormobilitywithineachnation,butnotbetweennationsNotransportationcosts,tariffsoroth
5、erbarrierstofreetrade.AllresourcesarefullyemployedinbothnationsInternationaltradebetweenthenationsisbalanced.FactorIntensity,FactorAbundance,andtheShapeoftheProductionFrontierFactorIntensityInatwo-commodity,twofactorworld,commodityYiscapitalintensiveifthecapital-laborratio(
6、K/L)usedintheproductionofYisgreaterthanK/LusedintheproductionofX.ItisnottheabsoluteamountofcapitalandlaborusedinproductionofXandY,buttheamountofcapitalperunitoflaborthatdeterminescapitalintensity.FIGURE5-1FactorIntensitiesforCommoditiesXandYinNations1and2.FactorIntensity,Fa
7、ctorAbundance,andtheShapeoftheProductionFrontierFactorAbundanceIntermsofphysicalunits:Nation2iscapitalabundantiftheratioofthetotalamountofcapitaltothetotalamountoflabor(TK/TL)availableinNation2isgreaterthanthatinNation1.Itisnottheabsoluteamountofcapitalandlaboravailableinea
8、chnation,buttheratioofthetotalamountofcapitaltothetotalamountoflabor.FactorIntensi