A Note on Factor Price Equalization

Chao Chiung Ting
2013 Business and Economics Journal  
An aggregated phenomenon and its corresponding phenomenon under firm level are supposed to be analogous. For example, the aggregate growth and the growth of the firm are analogous. This paper, therefore, studies Heckscher-Ohlin theorem and factor price equalization under two firms. Identical production function does not imply identical cost function because labor abundant countries have lower wage level than capital abundant countries. The difference in cost between two countries makes factor
more » ... ices be different between two countries although international trade makes product price be equalized.
doi:10.4172/2151-6219.1000085 fatcat:gu4lvx7u5bemxolbr7z3hua27m