Are Trade and Factor Flows Substitute or Complements?A case of Taiwan
Date Issued
2009
Date
2009
Author(s)
Wang, Chih-Hung
Abstract
Whether trade and factor mobility is complement or substitute is a lasting debate.The outcome of theortical model is also ambigious,so I try to use data in Taiwan to see the relationship between international trade and factor mobility in Taiwan. judge whether trade and factor mobility is complement or substitute by estimating the factor stock elasticity of net export,which is similar to the way brought up by Kar-yiu Wong (1988).My theoritical model is similiar to Feenstra and Hiau Looi Kee (2006).y conclusion is that when the exogenous shock makes capital flow into Taiwan,the net export of engineering and plastic increase,the net export of machinery falls,t lowers the price of capital and raise the pirce of labor;when the exogenous shock makes labor flow into Taiwan,the net export of engineering falls,he net export of machinery and plastic increase,t lowers the price of labor and raise the price of capital.
Subjects
trade
factor
substitute
complement
elasticity
Type
thesis
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