The factor proportions model, also known as the Heckscher-Ohlin model, is the main neoclassical model of international trade theory. It was developed by Swedish economists Eli Heckscher and Bertil Ohlin in 1920s and 1930s. According to the factor proportions model a country should specialize in...

Structural transformation supports higher output growth if it reflects the endowment fundamentals of the economy. Since the industrial structure is expected to align with factor- intensive sectors, structural coherence with factor proportions becomes an important consideration for industrial...

A half-century of empirical work on the factor proportions theory has identified devise simple amendments that bring theory and data into reasonable congruence. Our study considers standard and novel hypotheses regarding the failures of the Heckscher-Ohlin-Vanek formulation and is the first to...

Motivated by increasing trade and fragmentation of production across countries since World War II, we build a dynamic two-country model featuring sequential, multistage production and capital accumulation. As trade costs decline over time, global-value-chain (GVC) trade expands across countries,...