Factor abundance and Korea's comparative advantage in international trade
Date
1986
Authors
Im, Dong Young
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Abstract
Although the factor proportions theory is now the dominant theory of international trade, there has been considerable controversy over its empirical implications and how it should be applied. The objective of this thesis is to use the factor proportions theory to explain the commodity composition of Korea's trade and, in so doing, to assess the merits of alternate empirical approaches based on the theory.
The starting point is a regression model which employs the specification and interpretation introduced by Harkness (1978). This basic model is supplemented by alternate regression models and by various measures of the factor content of Korea's trade. The major conclusions are: that, under Harkness' interpretation, all of the regression models provide an explanation of Korea's trade which is consistent with the factor proportions theory; that, with imperfect data, the regression models provide a more consistent explanation than do other methods based on the measurement of the factor content of trade; and that, although the factor proportions theory is clearly important, other considerations do affect the commodity composition of Korea's trade.