Examination Of The Leontief Paradox Under The Perspective Of Global Value Chain

Factor endowment theory,which holds that the difference of factor endowment is the fundamental cause of international trade,is highly respected.With the emergence of the Leontief paradox,economists began to explore the ways to test HO theory.However,no matter the hypothesis is relaxed or the test method is adjusted,the test results cannot be unified.At the same time,the emergence of global value chains has changed the way of international trade.First of all,different from the traditional factor flow under the trade mode between the two countries,the cont inuous refinement of international divisio n of labor makes factors flow back and forth between national industries,changing the way and space of factor flow.In addition,processes such as research and development,design and packaging may be completed in different countries,depending on the technical level and labor proficiency and relative division of labor status of different industries.The emergence of intermediate trade breaks the source of the factor content of the original product.In other words,with the emergence of intermediate product input,the factor content of the product from the perspective of global value chain not only contains the traditional initial factor input,but also contains the intermediate factor input.Global value chain changed the traditional way of trade,which changed the way of factor flow and measurement.Based on this,this paper makes the following improvements to the traditional factor content of trade model.First of all,this article considers the features about factor intensity reversal,technical level differences,and intermediate goods trade,etc.to redefine the factor content of trade model under the perspective of global value chain,At the same time,based on the ICIO(inter-country input-output)model,the world input-output table of WIOD database was used to calculate the data of 35 sectors in 41 countries(or regions)from 1995 to 2009,to capture the flow of factors between national industries and re-examine the Leontief paradox.The results show that the factor endowment effect is significant under the Egger test and when the differences in consumption preferences,relative labor division and other conditions are further considered,and there is no " Leontief paradox".The introduction of different charact eristics of technology level and consumption preference greatly improves the prediction power of HOV model,which is more significant than factor endowment effect.In other words,the failure to isolate these two kinds of effects may be an important reason for the existence of "Leontief paradox".In addition,compared with highly skilled labor,the three types of effects are more prominent in the test of factor content of trade about capital,medium and low skilled labor,which basically conforms to the typical characteristics of the development o f global value chain combining international capital flow and medium and low skilled labor.