Applying Heckscher-Ohlin Theorem

The Heckscher-Ohlin (H - O) model is a general equilibrium model showing the influence of each country on different ownership of trade (Feenstra & Taylor, 2011). Because all production factors can move freely, the model shows a long-term effect. In this model, various assumptions are made, such as free trade counterparties of the same technical level, the same factors and similar factors can freely flow between industries. There are lots of other benefits to be imported.

Development based on Heckscher-Ohlin-Samuelson's theorem shows that if certain assumptions of the Heckscher-Ohlin model change, trade and migration may be complementary. For example, Markusen (1983) and Wong (1983) studied this problem. Markusen (1983) imposes the imposition of the same factor in the two countries, but mitigating one of the following Heckscher-Ohlin model assumptions shows that complementarity between immigration and trade is achieved . (B) same technology, (c) complete competition, or (d) domestic distortion. In that case, free trade will not lead to leveling of element prices. Various assumptions, especially complete competition and mitigation of a certain scale margin, can get various results. In addition, whether trade and immigration are substitutes or supplements for economies of scale and incomplete competition depends on the particular model being used.

The Heckscher-Ohlin (HO) model was originally formed by Eli Heckscher (1919) and two Swedish economists Bertil Ohlin. Eli's Heckscher's own student Bertil Ohlin developed a factorization theory and described it in detail. At the time, he was not only Professor of Economics of Stockholm but also Swedish politician. Ronald Jones and Paul Samuelson further developed and supplemented basic concepts. As an alternative to the Heckscher-Ohlin model, it is difficult to predict the transaction between the product model of the earth and a large number of products, so Heckscher-Ohlin-Vanek's theorem for predicting the capabilities of trading elements has been noted recently It is (econ.iastate.edu).

According to his thesis, he said the HOV model contains four theorems. Heckscher ohlin 's theorem, factor price equalization (FPE) theorem, Stopler Samuelson' s theorem and Rybczynski 's theorem. The first two theorems are best suited to explain the models of batting equations published by Trefler in the missing trade in 1995. The above F_fc indicates the content of the factor of the net exit, that is, the number of factors reflected by the export of the country. . V__fc represents the fund of element c of country c. S_ _ c is the percentage of country c in World Factor donation V__fw. Equation 1 above exports such goods when the country c is rich in factor f (V - - fc / V - fw> s - c) and the production of the factor f is exhaustive, thereby effectively expanding the factor f Output. Service (F_fc> 0) This inference comes from the HO theorem, and the HO theorem is based on the assumption that each country has the same taste.