Suchergebnisse

ABSTRACTThis paper shows that it is impossible to rule out factor‐intensity reversals (FIRs) under monopolistic competition unless production functions are homothetic. We construct a simple example where the capital‐intensity at unchanged output is fixed, but where FIRs still can occur because equilibrium output and thus the average capital‐intensity depends on the wage‐rental ratio.

Applies the two‐factor version of the Heckscher‐Ohlin‐Vanek (HOV)
theorem. Two hypotheses are derived. The empirical analysis offers
support for the second but not for the first hypothesis when trade of
each Organization for Economic Co‐operation and Development (OECD)
country with the rest of the world is analysed. Examines the factor
content of net trade with data on foreign trade between the OECD
countries and then determines average capital‐labour ratio as the OECD
average. Both the hypotheses receive empirical support. Finds that the
two‐factor version of the HOV theorem performs well when applied to the
environment where it is supposed to apply.