ChFactorendowmenttheory(国际经济学华中科技大学,方齐云)解说.ppt

Ch. 4 Factor endowment theory Factor abundance and factor intensity Assumptions of the theory Factor endowment and H-O theory Empirical test on H-O theory Factor abundance and factor intensity(1) Factor abundance Defined by factor endowment: assume that if Then we say country A is labor abundance and country B is capital abundance. Defined by relative factor price: assume that if Then we say country A is labor abundance and country B is capital abundance. Factor abundance and factor intensity(2) Assume that if Then we say product X is labor intensive product and product Y is capital intensive product. Assumptions of factor endowment theory There are 2 nations, 2 goods and 2 factors Both nations use the same technology in production There exists no factor intensity reversal Both goods are produced under constant returns to scale in both nations There is incomplete specialization in both nation (increasing opportunity cost) Tastes are equal in both nations There is perfect competition in both goods and factor markets in both nations There is perfect factor mobility within each nation and perfect factor immobility internationally There are no transportation costs, tariffs or other obstructions to the free flow of international trade All resources are fully employed in both nations International trade between the two nations is balanced 4 theorems in H-O theory H-O theorem (theorem about the comparative advantage and hence the patterns of trade determined by factor endowment): a nation will export the good whose production requires the intensive use of the nation’s relatively abundant and cheap factor and import the good whose production requires the intensive use of the nation’s relatively scarce and expensive factor. H-O-S theorem (the factor-price equalization theorem): international trade will bring about equalization in the relative and absolute returns to homogeneous factors across nations. The Rybczynski theorem (the effect of one factor growth on nation’s prod