This paper investigates an evidence to support the HOV model by carrying out a factor content analysis of trade of a single country, Vietnam, which has not been carried out before
MIRROR NUERON
Introduction
One of the most well-known trade theories which reveals that international trade is largely driven by differences in countries' resources was developed by Eli Heckscher and Bertil Ohlin. The theory emphasizes on predicting the pattern of trade in goods between two countries based on their differences in factor endowments. Heckscher and Ohlin started with the model of a two goods, two factors and two economies, concluding that each country would export the good that uses its abundant factor intensively1. Following this theory, Vanek presented the multi-good, multi-factor model, called the Heckscher-Ohlin-Vanek model (H-O-V model). The goal of this model is to make a relation between the factor content of trade and the endowments of a country.
The factor-content formulation of the HOV model attracted many empirical studies. The relationship between goods traded and factor endowments has been investigated by many researchers. Leamer, Bowen and Sveikauskas (1987)2 argued that the net trade of sectors is dependent on country-specific factor endowments rather than on sector-specific factor inputs. Trefler (1993, 1995), Davis and Weinstein (2001) and others were involved in extensive empirical testing on this theory. However, most are tested on the United States data or tested the HOV model by using data for a large number of countries3, calculating the factors of production embodied in a country's exports and imports. Then it was concluded that a country is a net exporter of the factor of production with which it is relatively abundantly endowed, or it is a net importer of those with which it is relatively poorly endowed. There have been few studies on a particular country's trade with the rest of the world or with a single partner.
This paper investigates an evidence to support the HOV model by carrying out a factor content analysis of trade of a single country, Vietnam, which has not been carried out before. Five production factors were taken into account; capital, land, un-skilled labour, semi-skilled labour, and high-skilled labour. Unskilled labor is defined as no education and primary education, semi-skilled labor is secondary education and vocational training, highly skilled labor is university degree. The method for testing this trade theory was based on matrices multiplatinum, resulting in two non-parametric tests, the 'sign test' and the 'rank test'. In addition, a Spearman's and Kendall correlation test was computed to check the relevance between the 'sign test' and the 'rank test' for the case of Vietnam.
This paper was outlined into seven sections, section I gives a brief introduction, section II reviews factor content studies. Section III focuses on an economic model specification. Section IV presents the data. Section V describes hypothesis testing. The two tests that are used in this paper to test the HOV theorem for Vietnam. Section VI gives a result of the multifactor-test of the HOV model in the trade between Vietnam and the world. Section VII presents conclusions and implications.
2 Literature review of the factor content studies
The concept of the factor content of trade originated with Vanek (1968). Under some assumption presented hereafters, it can be said that a good will embody fixed amounts of the services of the productive factors, independently of where it is produced. Therefore, trade is regarded as the international exchange of the factors embodied in those goods. Expression of the theory in this form also highlights the logic of the Heckscher-Ohlin theory in its focus on the relative availability of factors (Davis and Weinstein 2001:3).
As presented in detail in Feenstra, Advanced International Economics, (2001: 2-32), the HOV theorem states that a country exports its abundant factors through trade in goods. Since it is possible for a country to be abundant in more than one factor, the HOV theorem states that if trade is balanced a country exports all of its abundant factors through trade in goods. It means that countries tend to export the factor services of their relatively abundant factors and tend to import the factor services of their relatively scarce factors.
The assumptions of the HOV model are:
(i) perfect competition in the goods, immobility of production factors between countries, but complete mobility of production factors between sectors within a country.
(ii) identical input-output (technology) in all countries
(iii) production functions shows constant returns to scale
(iv) factor price equalization across countries
(v) No factor intensity reversal4
(vi) equal numbers of factors and goods
(vii) Identical homothetic utility functions in all countries.
(viii) Full employment of the production sectors.
In particular the assumptions of identical technology (identical input-output relations) and factor price equalization across countries may be crucial for the relevance of the HOV model. Deardorff (1982) shows that if both of these assumptions are met, factor intensity reversals cannot occur. These eight assumptions of the HOV model are more valid for a group of industrialized countries than for a mixed group of industrialized and developing countries5. Therefore the HOV model may usefully be applied to a group of industrialized countries, as in for example Cörvers and De Grip (1997) and James and Elmslie (1996). Moreover, models assuming constant returns to scale, such as the HOV model, must be distinguished from models that allow for economies of scale. Economies of scale are relevant for explaining intra-industry trade between industrialized countries (see also Deardorff, 1984). Following Leamer (1984), who also uses the HOV model, this paper does not incorporate such economies into the model because the model explains net trade, i.e. exports minus imports, instead of exports and imports separately. As for other assumptions of the HOV model, Leamer concludes that, if the above assumptions with regard to trade impediments, international factor mobility, non-traded and intermediate goods, transportation costs, factor market distortions and consumer preference dissimilarities are not fulfilled, outcomes from the HOV model are not seriously affected. Moreover, the results of the HOV model are less distorted by trade barriers now than they once were, as the barriers are gradually broken down by free trade agreements.
The theoretical framework of the factor content studies is defined as: Let Yi, Di, Ti represent the (nx1) vector of outputs in each industry, vector of demands of each good and vector of net exports for country i, respectively, so that Ti = Yi - Di. Let (mxn) matrix A=[ajk]' be input-output matrix, in which m represents the number of production factors that are internationally perfectly immobile. This leads to an equation in which factor services embodied in net exports are equal to the difference between the supply of factor services and the use of factor services, thus ATi = A(Yi - Di)
Define Fi as the mx1 vector of factor of net trade, which equals ATi by definition. Moreover, define Vi as the vector of factor endowments of country i, which equals AYi by definition. Finally, the factor content of consumption equals the share that country i uses from the mx1 vector of total world factor endowments, Vw. This share equals the share of national income, corrected for the trade balance B, in total world income. In other words, s = (GDPi/GDPw) .
This equation can be rewritten as follows:
Fi = ATi= Vi - sVw (1)
which is a statement of the Heckscher-Ohlin-Vanek (HOV) Theorem. In terms of individual factors, this is written as Fik = Vik - siVwk. HOV theorem specifies a relationship between factor content of trade and factor endowments. It can be interpreted that if country i's endowment of factor k relative the world endowment exceeds country i's share of world GDP (Vik/Vwk>si), then we say that country i is abundant in that factor. In that case, the above equation says that the factor-content of ...
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This equation can be rewritten as follows:
Fi = ATi= Vi - sVw (1)
which is a statement of the Heckscher-Ohlin-Vanek (HOV) Theorem. In terms of individual factors, this is written as Fik = Vik - siVwk. HOV theorem specifies a relationship between factor content of trade and factor endowments. It can be interpreted that if country i's endowment of factor k relative the world endowment exceeds country i's share of world GDP (Vik/Vwk>si), then we say that country i is abundant in that factor. In that case, the above equation says that the factor-content of trade in factor k should also be positive ( Fik> 0), and conversely if country i is scarce in factor k if Vik/Vwk< si. For example, let Ki and Li be the capital and labor endowment of country i, as Leammer (1980) defined that if Ki/Kw >Li/Lw then we say capital is abundant relative to labor in country i.
Therefore, Leamer reached a conclusion that the HOV theorem implies that if Ki/Lw > (Ki-Fik)/(Li-Fil) or if capital is abundant relative to labor in country i, the capital/labor ratio embodied in production exceeds the capital/labor embodied in consumption.
Moreover, the equation (1) can be re-writen as follows:
Fik/Vwk Vik/Vwk
---------------- = -------------------- - 1 (2)
GDPi/GDPw GDPi/GDPw
The right-hand side of this equation reflects the relative true factor endowments of country i,
if the right-hand side is positive for a particular factor k in country i, then the country has a true abundance of this factor. The left-hand side of the equation reflects the trade-revealed factor endowments indicated by a country's net trade, and will be used for the factor content analysis of this paper. If the left hand side of equation (2) is positive, then country i has a revealed abundance of this factor. This implies that country i has a revealed comparative advantage in goods that make intensive use of factor k. The left-hand side of the equation is corrected for the trade balance, so that a country with for example a positive trade balance has both positive and negative trade revealed factor endowments. The relationship between the true factor abundance and the trade-revealed factor abundance is a consequence of the HOV theorem, which implies that countries that have an abundance of a particular production factor k should have net exports of the factor services of factor k.
The last fifteen years have seen wide swings in trade economists' views of models of the factor content of trade. Pioneer studies were made by Leamer (1980 and 1984), Bowen, Leamer and Sveikauskas (1987) and Maskus (1985). It was not so easy to see that this represented only a phase in the development of the literature of the trade theory. More recent studies, such as Trefler (1995) performed the signal service of identifying anomalies in the data which further research could aim to understand. The most recent studies, such as Davis and Weinstein (2001a), have been much more positive for amended versions of the theory.
These studies explained the patterns of trade, especially exploring a paradox called Leontif Paradox.
Wassily Leontief6 (1953) computed the total input requirements and capital and labour per unit of US exports commodity and US imports commodity. His results showed that the US exported labour-intensive goods and imported capital intensive ones, though the US was generally considered as a capital abundant country relative to all trading partners. Leontief paradox has stimulated many studies which tried to explain this paradox.
Leamer (1980) recognized the trade surplus reality of the data. His analysis was based on the HOV model (and theorem with many factors and goods). In Leamer's view (Leamer (1984) and Leamer and Levinsohn (1995), Leontief had performed the wrong test! That is, even if the HO model is true, it turns out the capital/labor ratios in export and imports should not be compared. Instead, an alternative test should be performed: factor content of US production and consumption should be used instead of import and export factor content. By using this test, Leamer was successful in explaining the reality of the US trade base on the H-O-V model, and his result was a precise application of the H-O-V model. (Leamer, 1980. 'The Leontief Paradox reconsidered', Journal of Political Economy, 88: 495-503)
Factor content studies since then increasingly tended to be multi-country studies based on the Heckscher-Ohlin-Vanek (HOV) theorem equating factors embodied in net trade to excess factor endowments. Empirical HOV studies used impressive data sets on exports, imports, factor endowments and technology for a large number of countries. Leamer (1984) and Sveikauskas (1987) used 1967 data on 12 factors and 27 countries. They tested sign and rank propositions derived from the HOV theorem, but found only modest support for the factor proportions model. Trefler's (1993, 1995) examination of 1983 data on 10 factors and 33 countries accounting for 76 percent of world exports found zero factor content in net trade.
Compared to the Heckscher - Ohlin theorem, one major advantage of factor content analysis is that it requires less restrictive assumptions. According to Davis and Weinstein (2001a), the multidimensional case of the commodity version states that countries tend to export those goods which require relatively great inputs of their relatively abundant production factors and tend to import those goods which require relatively great inputs of the production factors in which they are relatively poor. Under this less restrictive assumption, the commodity composition of trade flows is not uniquely determined, whereas the factor services incorporated in the exports and imports are uniquely determined.
To sum up, empirical studies on the H-O-V theory have a great impact on trade literature. However, there only have been many research conducted for the United States and these studies focused on testing the factor content of trade of many countries though different periods of time. Only a few studies emphasized the trade of a specific country with the rest of the world or with a particular region. This research provides evidence for the HOV theorem by testing the factor content of trade between Vietnam and the world.
3 Data description
Data required for testing the H-O-V model are factor contents, factor endowments, trade flows in 1997 for Vietnam and the world. The year 1997 was chosen due to the availability of data. Data for net exports and factor contents of Vietnam was collected from the Social Accounting Matrix 1997 (prepared by Poh Nielsen). The data sources used to construct the SAMs included national accounts statistics, the official 1997 input-output table and COMTRADE trade data. This resulted in a consistent set of National Accounts and labour market data for 33 industries (which were grouped in to nine major sectors in this paper). The classification of sectors was listed in Appendix A.
Moreover, the Social Accounting Matrix supplied corresponding details on the wages for total employment in full-time equivalents per industry and for the skilled level categories.
In particular, data for factor contents of Vietnam was calculated based on the sectoral cost structure. Cost for agricutural sector was grouped based on calculation of nine main commodities and all others in the SAM Vietnam 1997 (see more detail in Appendix B, table B.1). Also, cost for manufacturing sector was computed based on cost of commodities of processing food and other manufacturing. Data for this sub-industry was taken from input-output table for Vietnam 1997 (see Appendix B, table B.2). Most importantly, factor endowment for production of nine sectors was calculated and represented in Appendix B, table B.3. All figures were calculated based on the current price of the year 1997.
The data for trade flows of Vietnam was collected from the Global trade databases. GDP for Vietnam in 1997 was taken from the Annual report for Vietnam, published by the World Bank7. Data for GDP of the world, factor endowments of the world were collected from the Global trade databases8.
4 Model estimation and hypothesis testing
The qualitative content of equation (1) has been tested in two ways:
- Sign test: sign (Fik) = sign (Vik - siVw)
- Rank test: If Fik > Fil then Vik - siVw > Vil - siVwl
If the computed factor contents of one factor (trade revealed factor abundance) exceeds that of a second factor, then it is necessary to check whether the relative true abundance of that first factor also exceeds the relative abundance of the second factor.
The relationship between the true factor abundance and the trade-revealed factor abundance is a consequence of the HOV theorem, which implies that countries that have an abundance of a particular production factor k should have net exports of the factor services of factor k.
Applying the test formula , this paper attempts to test the HOV theory in the trade between Vietnam and the world. In this case, equation (1) become:
Fv = ATv= Vv - sVw (3)
Where v denotes Vietnam, w denotes the world, V is factor endowment.
T is vector of net export of Vietnam to the world (in the test nine sectors, the vector has nine elements).
Vv and Vw are factor endowments of Vietnam and the world, respectively (in the test of this paper, fice factors of production are used, it means that each vector has five elements).
In terms of individual factors, this is written as:
Fvk = Vvk - svVwk (4)
Sign test: We will check the 'sign' test by comparing the sign of both the left hand side and the right hand side of equation (3) to see whether they are the same or not.
The 'rank' test will be based on equation (4); the factor endowments will be ranked by comparing the absolute values of net export of each endowment by calculating the left hand side of the equation. In addition, the rank test was based on computing shares in the endowments of Vietnam to total endowments of the world. For example, if there are two factors, unskilled-labour (ul) and semi-skilled (sl) labour which both have positive net export, if (Ful/Vl) > (Fsl/Vl) then un-skilled labour would be revealed to be more abundant than semi-skilled labour.
Factor content analysis of trade refers to measures of trade-revealed factor endowments, which is based on the left-hand side of equation (3). The right-hand side of equation (3) measures the true factor endowments. Both methods of measuring the factor endowments of Vietnam are examined. The true factor endowments of Vietnam are calculated relative to the world. For this reason, the true factor endowments are called the relative true factor endowments. Equation (4) indicates that the two definitions of factor abundances must correspond to each other. If the factor contents of trade flows are not in line with the relative true factor endowments, then the HOV theorem must be rejected. By using data at the country level, Section VI shows the abundant and scarce factor endowments of Vietnam, and whether the HOV theorem is confirmed or rejected for Vietnam.
5 The results of the two test and interpretation
Table 1 presents the results from calculating the left hand side of equation (4) for each factor: capital, land, unskilled labour, semi-skilled labour and high-skilled labour.
All the results were presented in absolute values, US dollars, current price in 1997.
Table 1 Measured factor content of trade, Vietnam 1997
Factors
Factor content of trade
Signs of factor content of trade
Ranking
. Capital
-2.1075
-
5
2. Land
+1.8053
+
3. Un-skilled labour
+1.09724
+
2
4. Semi-skilled labour
-1.3170
-
4
5. High-skilled labour
-0.08958
-
3
Note: The positive value of the factor content of trade indicates that the factor is exported while the negative value indicates that the factor is imported.
Source: Author's own calculation.
The positive value of the factor content of trade indicates that the factor is exported while the negative value indicates that the factor is imported.
Table 1 reveals that factor contents of trade on capital, high and intermediate skill labor was negative, those of land and un-skilled labour are positive. It also shows rank order from the most abundant to the least abundant production factor in Vietnam: land, un-skilled labour, semi-skilled labour, high-skilled labout, capital.
According to the H-O-V theorem, this means that Vietnam exports the goods that uses its abundant factor intensively to the world. Vietnam makes foreign partners use some of its abundant land and unskilled labour not by selling them directly but by trading goods produced by using these factors intensively. In fact, the major export goods of Vietnam are crude oil, agricultural products, garments, aquatic products and footwear, accounting for 66 per cent of total export value in 1997. Trade in agricultural products owes comparative advantage to the availability of land and unskilled labour. Vietnam is in comparative disadvantage in capital-intensive good and machinery due to lack of capital. Both calculation result and reality figures support the hypothesis.
Table 2 Measured factor endowment of Vietnam relative to the world
Factors
Factor Endowment Measure
Signs of factor endowment measure
Ranking
Capital
-3.616
-
5
Land
.956
+
2
Un-skilled labour
2.388
+
Semi-skilled labour
-0.7232
-
4
High-skilled labour
-0.3679
-
3
Source: Author's own calculation.
Table 2 calculates the factor endowment measure of the right hand side of equation (4). This equation expresses trade in terms of excess endowments (Vv - svVw). The sign of the factor endowment shows that Vietnam is a land abundant and un-skilled labout abundant country while it is in shortage of capital, semi-skilled labour and high-skilled labour. Therefore, the comparative advantage of Vietnam in agricultural products is associated with abundance of land and unskilled-labour. Vietnam does not export high-tech goods since capital is the source of comparative advantage for capital-intensive goods and machinery.
Comparison of true and trade-revealed factor endowments
Table 3 derives from Table 1 and Table 2 and suggests that the signs of the factor abundant endowments and of net exports of factor match, meaning that the sign test is successful. It can be concluded that data on trade between Vietnam and the world supports the HOV theorem.
Table 3 Measures of factor abundance of Vietnam relative to the world
Factors
Factor content of trade
Rank
Factor Endowment Measure
Rank
Capital
-2.1075
5
-3.616
5
Land
+1.8053
.956
2
Un-skilled labour
+1.09724
2
2.388
Semi-skilled labour
-1.3170
4
-0.7232
4
High-skilled labour
-0.08958
3
-0.3679
3
Source: Author's own calculation.
The next step of the analysis is to compare the rank order of the relative true factor endowments in Table 1, to the rank order of the trade-revealed factor endowments in Table 2. Comparing these rank orders shows that both rank orders are identical, except that the rankings of land and un-skilled labour are switched.
Furthermore, this table demonstrates that the trade performance of Vietnam, measured by exports minus imports, is dependent on the country-specific abundance of land, low-skilled labour. This implies that Vietnam has a comparative advantage in goods that make intensive use of unskilled-skilled and land, and a comparative disadvantage in goods that make intensive use of capital, intermediate and highly-skilled labour.
The limitation of the study is that the absolute value of trade-revealed factor endowment (value of F: the left hand side of equation 4) and the relative true factor endowment (value of the right hand side of equation 4) do not coincide. This may be due to five factors: first, a key explanation is that each country uses different production techniques, these differences reflect factor endowment differences. Therefore, factor content studies that use a common technology matrix will systematically understate actual factor content. This leads to a failure in the assumption of factor price equalisation. Second explanation for the early failure to find factor content is an apparent 'bias' in consumption towards locally produced goods. Third, although the input-output tables are becoming available for many countries, they are arguably not the highest quality economic data available. Fourth, the differences between the trade-revealed factor content and relatively true factor endowment also comes from the introduction of costs to international trade, which could have a strong effect on trade volume9. Finally, goods of intermediate factor intensity fall into the non-traded sector, so we tended to underestimate the true factor content of trade. There is a systematic correlation between country capital abundance and industry input usage not only in tradables (where this now suggests specialization) but also in non-tradables (where this suggests factor substitution).
Thus, a mismatch can occur in calculating the factor content of trade and relatively true factor endowment. Some researchers are trying to build a new model that predicts some of the technology and demand modifications needed by the empirical factor content studies to make the Heckscher-Ohlin model fit the data.
In addition to the two tests, based on the figures in column two and four, Spearman's and Kendall's correlation was computed. The value of coefficient is 0.9 and the correlation is statistically significant at 97% level of confidence. In addition, Kendall's correlation was also performed for the rank test using information in column three and five, the coefficient is also 0.9, and it is significant at 96% level of confidence. Therefore, findings of the 'sign test' and 'rank test' support the H-O-V theorem in trade between Vietnam and the world.
6 Conclusion
The HOV theorem on trade between Vietnam and the world was tested by measuring both true and trade-revealed factor endowments. Two non-parametrics tests were conducted, the 'sign test' and the 'rank test'. Since the sign test was completely successful and the rank orders of factor abundance according to both methods of measurement are very similar, the HOV theorem is confirmed.
The analysis of Vietnam's factor endowments has shown that Vietnam has factor abundances in land and un-skilled labour, land whereas it has factor scarcities in capital, semi-skilled labour and highly-skilled labour. This implies that Vietnam has a revealed comparative advantage in goods that are intensive in the use of land and un-skilled labour and a comparative disadvantage in goods that are intensive in the use of capital, semi-skilled labour and highly-skilled labour. Therefore, the theory performed well, indicating that the relevant framework may be a reasonable framework for policy studies. In addition, studies of the factor content of trade may help in addressing policy questions of the impact of openness on national income levels and distribution. In fact, there already is a study mapping measures of the factor content of trade into impacts on domestic relative wages for the United States and other members of the Organization for Economic Cooperation and Development (OECD) under some conditions which such a mapping makes sense. This work has been very important in clarifying issues to be addressed in future work. A major area for future work is taking the empirical frameworks favored by the studies of factor content and find out the consequences of international integration on incomes and inequality. To sum up, study on factor content of trade bring out a deep understanding of how resources may drive patterns of trade between a country and other countries, and between a country and a region.
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Appendix A
Classification of sectors
. Agricultural
Abbreviation
Paddy
Raw rubber
Coffee bean
Sugar cane
Other crops
Pork
Poultry
Other live stock and poultry
Irrigation services
Other agricultural services
Paddy
Rwrubber
Coffeebean
Sugarcane
Othcrops
Pork
Poultry
Ohlvstt
Irrg sev
Othagr
2. Forestry
3. Fisheries
4. Mining
5. Manufacturing
Processed meat
Processed vegetable and animal oil and fat
Dairy
Cakes, jams, candy, coca, chocolate products
Processed and preserved fruits and vegetables
Alcohol
Non-alcoholic water and soft drinks
Refined sugar
Processed coffee
Processed tea
Cigarettes and other tobacco products
Processed sea food
Other
Prcmeat
Pvaoil
Dairy
Ckechoc
Pfrtveg
Alchohol
Naldrink
Refsugar
Prcoffee
Prtea
Cigtbcc
Prseafd
Other
6. Electric, gas & water
7. Construction
8. Transportation services
9. Other
Appendix B
Table B.1 Factor Endowment of agricultural sector, Vietnam 1997 (VND billion)
Agriculture
Capital
Land
Unskilled
labour
Semi-skilled labour
High-skilled labour
Total Value
Paddy
706.17
1353.09
8740.75
249.38
54.32
54321
Rwrubber
21.55
54.69
480.57
31.73
.26
268
Coffeebean
304.56
329.91
187.78
76.14
5076
Sugarcane
32.41
374.26
959.75
26.72
2947
Othcrops
522.36
6686.20
1570.27
757.42
26.11
26118
Pork
465.18
0
6143.21
396.78
3.68
3682
Poultry
34.50
0
3824.90
251.38
9.85
4929
Ohlvstt
252.41
0
791.75
15.86
4.13
4138
Irrg sev
11.11
0
60.55
77.12
72.74
100
Othagr
85.64
0
05.56
307.58
300.38
820
Total
2635.91
9898.17
45865.07
3490.08
590.41
Source: Chantal P. Nielsen, 2002. Social Accounting Matrix for Vietnam, Danish research institute of Foods Economics.
Table B.2 Factor Endowment of manufacturing sector, Vietnam 1997 (VND billion)
Manufacturing
Capital
Unskilled- labour
Semi-skilled labour
High-skilled labour
Total value
Prcmeat
08.54
289.44
57.89
4.82
2412
Pvaoil
92.326
273.49
55.74
3.48
742
Dairy
81.46
229.99
46.42
2.11
2110
Ckechoc
52.832
44.87
30.25
.59
592
Pfrtveg
96.679
215.98
43.19
2.05
2057
Alchohol
638.432
887.48
82.05
1.37
5689
Naldrink
450.72
287.33
59.16
2.82
2817
Refsugar
507.93
85.13
37.97
4.74
4747
Prcoffee
41.61
62.06
32.85
2.19
730
Prtea
44.66
45.47
0.81
44.66
812
Cigtbcc
741.86
658.34
32.65
9.82
4913
Prseafd
663.01
976.76
405.17
24.55
2278
Other
928.27
2608.84
510.42
56.71
56714
Total processing food
7965.21
594.59
70.95
Manufacturing
0929.71
3518.33
5177.23
431.43
43812
Total
7578.05
21483.54
6771.82
602.39
Source: Chantal P. Nielsen, 2002. Social Accounting Matrix for Vietnam, Danish research institute of Foods Economics.
Table B.3 Factor endowment for production, 1997 (VND billion)
Capital/GDP
Land/GDP
Unskilled labor/GDP
Semiskilled labor /GDP
Highskilled labor /GDP
Agriculture
0.0383
0.3020
0.6961
0.0529
0.0089
Forestry
0.0164
0.7263
0.1483
0.0320
0.0015
Fisheries
0.0856
0.2914
0.7836
0.0266
0.0019
Mining
0.7301
0.0000
0.2408
0.0894
0.0054
Manufacturing
0.3340
0.0000
0.4148
0.1309
0.0116
Electric, gas & water
0.1925
0.0000
0.2876
0.2171
0.0129
Transportation services
0.1903
0.0000
0.2201
0.0468
0.0035
Other
0.3349
0.0000
0.3311
0.2521
0.1291
Construction
0.3228
0.0000
0.4705
0.1052
0.0058
Source: Author's own calculation.
Table B.4 Net exports for Vietnam 1997
Export (billion VND)
Import (billion VND)
NET export (billion VND)
Net export (USD)
Agriculture
9744.46
1430.29
8314.17
0.71
Forestry
270.47
643.96
-373.49
-0.03
Fisheries
3651.37
0.00
3651.37
0.31
Mining
24612.95
321.98
24290.97
2.08
Manufacturing
70593.20
16395.80
-45802.60
-3.92
Elec, gas & water
0.00
4006.13
-14006.13
-1.20
Construction
0.00
0.00
0.00
0.00
Transportation services
540.94
5151.68
-4610.74
-0.39
Other
5957.85
3201.18
2756.67
0.24
Source: World Bank Development Report 2003
Table B.5 Factor content of trade in nine sectors
Sectors
Factor content of trade
Agriculture
.59
Forestry
-0.01
Fisheries
4.58
Mining
0.40
Manufacturing
-6.01
Electric, gas & water
-3.34
Transportation services
-1.10
Other
0.02
Construction
0.00
Source: Author's own calculation.
See details on Feenstra, Advanced International Trade
2 See Bowen, Leamer, and Sveikauskas, "Multicountry, multifactor tests and the factor abundance theory"
3 A sample of empirical works on H-O model conducted on a large group of countries are those of Maskus (1985), including 34 countries, Bowen et. Al. (1987) used a sample of 27 countries.
4 See more factor intensity reversals in International Economics (I.92), Giancarlo Gandolfo
5 Generalizations of the HOV theorem without assuming factor price equalization are found in Brecher and Choudhri (1982), Deardorff (1982) and Helpman (1984).
6 Leontief received a Nobel Prize for the development of input-output analysis
7 See World Bank Development Report 2003
8 Prepared by Betina V. Dimarana and Robert Ms Dougall
9 See McCallum (1995), Helliwell (1999), Parsley and Wei (2000) and Anderson and van Wincoop
(2003) for the effects of borders on trade volumes.
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