Evaluating the Heckscher-Ohlin-Vanek (HOV) Approach in expansion of Iran's Trade Relations with its Trading Partners

Document Type : Research Paper


1 Department of Economic, University of Isfahan, Isfahan, Iran

2 Professor of Economics, Department of Economics, University of Isfahan, Isfahan, Iran

3 university of isfahan


Enhancement of two-factor model by adding more factors such as human capital, knowledge capital and R&D expenditure implies the actual economic advantages, which provide policy makers with priorities and requirements of export development strategies. This paper has studied Iran's trade relations with its major trading partners (China, UAE, Iraq, Turkey, South Korea, India, Japan, Russia and Germany) based on the Heckscher-Ohlin-Vanek (HOV) approach, in which the expansion of trade relations could be evaluated through a framework of factor intensity. The innovation of this study is thus to define several factors, including skilled labor, unskilled labor, human capital, physical capital, knowledge capital, research and development (R&D) expenditures, productivity and energy, as the factor content of the countries’ exports during 1990-2016.
According to R&D expenditure which has uncertain effect on exports and do not follow a particular distribution function among countries as well as industries, its effect can be considered as nonparametric, while other factors should have parametric effects on comparative advantages of exportable goods and services. Therefore, in this paper, a semi-parametric method has been used to specify the panel export model for Iran and its major trading partners. The empirical results have shown that among the considered factors, human capital, skilled labor and knowledge capital have had the most pronounced parametric effects on the export advantages of the countries. Additionally, the nonparametric part of the model has implied that a higher percentage of R&D expenditure has influenced significantly exports of these countries.
JEL Classification: C14, F14


Main Subjects

افشاری، زهرا و سلیمانی موحد، مریم (1390). "آزمون تئوری هکشر- اهلین-ساموئلسن در تجارت درون صنعت ایران (رویکرد داده‏های ترکیبی پویا)"، پژوهشنامه بازرگانی، 14(54): 1-23.
ترابی، حمزه، بقایی پور، مژگان (1393). "رگرسیون ناپارامتری"، اندیشه آماری، ۱۵ (۱):۴۱-۵۵.
تقوی، مهدی و جهانگرد، اسفندیار و صفوی، راشد (1390). "بررسی وتحلیل مدل هکشر-اهلین-ونک در اقتصاد ایران"، فصلنامه تحقیقات مدل‌سازی اقتصادی، 3، 45-69.
رجب­زاده مغانی، ناهید، سلیمی­فر، مصطفی و سیدآقاحسینی، سیدمحسن (1394). "بررسی تأثیر سرمایه­گذاری در سرمایه انسانی بر رشد اقتصادی در کشورهای منطقه خاورمیانه و شمال آفریقا با استفاده از روش GMM"، فصلنامه پژوهش و برنامه­ریزی در آموزش عالی، 21(1)، 19 -1.
قائمی اصل، مهدی، سلیمی­فر، مصطفی (1392). "برآورد شبه پارامتریک تابع تولید کشاورزی مبتنی بر مدل‌سازی پویایی­های بهره­وری) مطالعه موردی: برآورد تابع عملکرد گوجه فرنگی استان­های منتخب ایران)"، تحقیقات اقتصاد کشاورزی، 4(4)، 191-224.
کشاورز حداد، غلامرضا و باقری قنبرآبادی، مرتضی (1390). "تحلیل احتمال مشارکت زنان شهری و روستایی ایران در بازار کار با استفاده از روش­های اقتصادسنجی پارامتریک و ناپارامتریک"، تحقیقات اقتصادی، 79، 131 -196.
ناظمان، حمید و موحدمنش، صادق ‏علی (1390). "بررسی ارتباط تجارت درون صنعت و مزیت نسبی در اقتصاد ایران"، فصلنامه پژوهشنامه بازرگانی، 59، 1-24.

Andersson, M., & Johansson, S. (2010). “Human Capital and the Structure of Regional Export Flows”, Technology in Society,  32(3), 230-240.
Amoroso, N., Chiquiar, D., & Ramos, M. (2011). “Technology and Endowments as Determinants of Comparative Advantage: Evidence from Mexico”, North American Journal of Economics and Finance 22, 164–196.
Bandi, F., & Philips, P. (2003). Fully Nonparametric Estimation of Scalar Diffiusion Models, Econometrica, 71(1): 241-283.
Baltagi, B. (2008). Econometric Analysis of Panel Data, Forth Edition, Wiley & Sons, England.
Bertrand, M. Koebel, B. M., Anne-Laure Levet A., Nguyen-Van, P. Purohoo, I., & Guinard, L. (2016). “Productivity, Resource Endowment and Trade Performance of the Wood Product Sector”, Journal of Forest Economics, 22, 24–35.
Chen, X., & Pouzo D. (2012) “Estimation of Nonparametric Conditional Moment Models with Possibly Nonsmooth Generalized Residuals”, Econometrica, 80(1), 277–321.
Chor, D. (2010). “Unpacking Sources of Comparative Advantages: A Quantitative Approach”, Journal of International Economics, 82(2), 152–167.
Coe, D.T., Helpman, E., & Hoffmaister A., (2009). “International R&D Spillovers and Institutions”, European Economic Review, 53, 723–741.
Cunat, A., & Melitz, M. (2007). Volatility, Labor Market Flexibility, and the Pattern of Comparative Advantage, NBER Working Paper No. 13062
Davis, D. R., Weinstein, D. E., Bradford, S. C., & Shimpo, K. (1997). “Using International and Japanese Regional Data to Determine When the Factor Abundance Theory of Trade Works”, American Economic Review 87 (3), 421–446.
Debaere, P. (2003). “Relative Factor Abundance and Trade”, Journal of Political Economy 111 (3), 589–610.
Do, Q. Levchenko, A., & Raddatz, C. (2016). “Comparative Advantage, International Trade, and Fertility”, Journal of Development Economics, 119, 48–66.
Doruk, Ö. T. (2015). Intra Industry Trade and R&D Intensity: An Empirical Assessment for Turkey, 4th International Conference on Leadership, Technology, Innovation and Business Managemen, 210, 52 – 57.
Durlauf, S., & Blume, L. (2010). Microeconometrics, Houndmills, Basingstoke, Hampshire; New York: Palgrave Macmillan, the New Palgrave Economics Collection.
Feenstra, R. (2002). Advanced International Trade Theory and Evidence, University of California, Davis, National Bureau of Economic Research.
Fleisher, B. M., McGuire, W. H., Smith, A. N., & Zhou, M. (2015). “Knowledge Capital, Innovation and Growth in China”, Journal of Asian Economics, (39), 31-42.
Johansson, M. (2004). The Statistical and Economic Role of Jumps in Continuous-Time Interest Rate Models, The Journal of Finance, 1(2): 227-260.
Kadochnikov, S. M., & Fedyunina A. A. (2017). “The Impact of Financial and Human Resources on the Export Performance of Russian Firms”, Economic Systems, 41(1), 41-51.
Kiyota, K. (2013). “Skills and Changing Comparative Advantage: The Case of Japan”, Japan and the World Economy, 28, 33–40.
Lai, H., & Chun Zhu, S. (2007). “Technology, Endowments, and the Factor Content of Bilateral Trade”, Journal of International Economics, 71, 389–409.
Leamer, E. (2000). “What’s the Use of Factor Contents?” Journal of International Economics, 50, 17–49.
Malikov, E., & Sun, Y. (2017). Semi-parametric Estimation and Testing of Smooth Coefficient Spatial Autoregressive Models”, Journal of Econometrics, 199, 12–34.
Mamuneas, T. P., Savvides, A., & Stengos, T. (2006). “Economic Development and the Return to Human Capital: A Smooth Coefficient Semiparametric Approach”, Journal of Applied Econometrics, 21, 111–132.
Maskus, K. E., & Nishioka, S. (2009). “Development-Related Biases in Factor Productivities and the (H-O-V) Model of Trade”, Canadian Journal of Economics, 42 (2), 519–553.
Nishioka, S. (2013). “R&D, “Trade in Intermediate Inputs, and the Comparative Advantage of Advanced Countries”, Journal of the Japanese and International Economies, 30, 96–110.
Ohadi Esfahani, S., & Tayebi, S. K. (2014). “the Role of R&D in Trade Expansion: A Semi-parametric Gravity Specification for East and West Asia”, International Economic Studies, 44(1), 15- 26.
Pagan, A., & Ullah, A. (1999). Nonparametric Econometrics Cambridge University Presss, 6-8.
Ribierre, C. O. (2015). Essays on the Factor Content of Trade and Education, ProQuest Number: 3728174.
Sauré, P. (2017). “Time-intensive R&D and Unbalanced Trade”, European Economic Review, 91, 229-244.
Trefler, D. (1999). “An Interview with Elhanan Helpman”, Macroeconomic Dynamics, 3(4), 571–601.
Trefler, D., & Chun Zhu, S. (2010). “the Structure of Factor Content Predictions”, Journal of International Economics, 82, 195–207.
Yarbrough, B. V., & Yarbrough, R. M.  (2009). the World Economy: Trade and Finance, 7th Edition, USA: Thamson South-Western Ltd.
Zymek, R. (2015). “Factor Proportions and the Growth of World Trade”, Journal of International Economics, 95, 42–53.