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The factor proportions model of international trade is one of the most influential theories in international economics. Its central standing in this field has appropriately prompted, particularly recently, intense empirical scrutiny. A substantial & growing body of empirical work has tested the predictions of the theory on the net factor content of a country's trade with the rest of the world, usually under the maintained assumptions of factor price equalization & identical homothetic preferences across trading countries (or under quite specific relaxations of these assumptions). In contrast, this paper uses OECD production & trade data to test the restrictions (derived by Helpman) on the factor content of trade flows that hold even under nonequalization of factor prices & in the absence of any assumptions regarding consumer preferences. In a further contrast with most of the existing literature, which has focused on the factor content of a country's multilateral trade, our tests concern bilateral trade flows, thereby enabling the examination of trade flows between only a subset of countries for which quality data (relatively speaking) are available. We find that restrictions implied by the theory cannot be rejected for the vast majority of country pairs considered in our analysis. 6 Tables, 1 Figure, 2 Appendixes, 21 References. Adapted from the source document.

Using a plant‐product‐matched dataset for Korean manufacturing, this paper examines the effect of import tariff reductions on plants' product portfolios in domestic and export markets. We find that the responses of innovators are quite different from those of non‐innovators, particularly in the domestic market. When import tariffs are reduced, innovators reduce their product scope but increase their average scale of production in the domestic market. By contrast, non‐innovators do not change their domestic product scope significantly, but they experience a decrease in the average scale of production, leading to a significant reduction in domestic shipments. We do not find significantly different responses between innovators and non‐innovators in the export market.