SOME EMPIRICAL SUPPORT FOR THE HECKSCHER-OHLIN MODEL OF PRODUCTION

This paper develops empirically feasible tests of the production side of the Heckscher- Ohlin model of international trade, in the case where factor prices are not equal between countries. To allow for factor-price differences across industries within each country, three variants of the model are considered. Tests of these variants are implemented for Canada and the United States. Results are favourable to all three variants, especially the variant that allows imperfect factor mobility within each country. Thus, the paper finds some support for the Heckscher-Ohlin model of production.