An Evaluation of Factor Endowments and Protection as Determinants of Japanese and American Foreign Trade

Robert Staiger, Alan Deardorff and Robert Stern

Canadian Journal of Economics, 1987, vol. 20, issue 3, 449-63

Abstract: The authors consider the relationship between the factor content of Japanes e and American foreign trade and examine empirically whether discrepa ncies between the Heckscher-Ohlin theoretical predictions and the obs erved patterns of trade can be attributed to protection. The Michigan Model of World Production and Trade is used for computational purpos es. They find some evidence of discrepancies between predicted and ob served trade patterns, but removal of protection either worsens these discrepancies or reduces them by only a small amount. Some possible reasons for the empirical shortcomings of the Heckscher-Ohlin theory are offered in conclusion.

Date: 1987
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