Heckscher-Olin Theory and Non-Competitive Markets

23 Pages Posted: 20 May 2004 Last revised: 17 May 2021

See all articles by Robert W. Staiger

Robert W. Staiger

Stanford University; University of Wisconsin - Madison - Department of Economics; National Bureau of Economic Research (NBER)

Date Written: February 1988

Abstract

This paper derives statements of the Heckscher-Ohlin Theorem which remain valid in the presence of market power. Following Helpman (1 984a), the paper explores restrictions on permissible trade patterns that are implied by the post-trade equilibrium conditions of Heckscher- Ohlin theory. Restrictions on the patterns of commodity trade are derived to complement Helpman's factor content version of the competitive Heckscher-Ohlin theory, and the introduction of factor market power is shown to leave the validity of these restrictions unaffected, Restrictions on the pattern of Heckscher-Ohlin trade in the presence of product market power are also derived, and conditions are stated under which Helpman's competitive factor content restrictions continue to hold.

Suggested Citation

Staiger, Robert W., Heckscher-Olin Theory and Non-Competitive Markets (February 1988). NBER Working Paper No. w2515, Available at SSRN: https://ssrn.com/abstract=425549

Robert W. Staiger (Contact Author)

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