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- Title
An extended Heckscher-Ohlin model with transaction costs and technological comparative advantage.
- Authors
Wenli Cheng, John; Sachs, Jeffrey; Xiaokai Yang
- Abstract
This paper introduces technological differences and transaction costs into the Heckscher-Ohlin (HO) model and examines the HO theorem, factor price equalization theorem, the Stolper-Samuelson theorem and the Rybczynski theorem. It shows that the HO theorem can be refined, and that the factor price equalisation theorem, the Stolper-Samuelson Theorem and the Rybczynski theorem do not always hold. It also shows that transaction costs play an important role in determining the equilibrium trade pattern.
- Subjects
HECKSCHER-Ohlin principle; COMPARATIVE advantage (International trade); INTERNATIONAL trade; TRANSACTION costs; ECONOMIC equilibrium
- Publication
Economic Theory, 2004, Vol 23, Issue 3, p671
- ISSN
0938-2259
- Publication type
Article
- DOI
10.1007/s00199-003-0405-0