Abstract

DIAZ ESPANA, Víctor Alexánder. The Neoclassical Theory of International Trade Works? The Case of Colombian Economy Between 1980 and 2007. Soc. Econ. [online]. 2014, n.27, pp.177-205. ISSN 1657-6357.

In this work we address the debate about the validity of the neoclassical theory of international trade. We estimate a trade gravity model for the Colombian economy with the purpose of examining the empirical validity of this theory. Using a panel year-based data for trade and gravity variables for Colombia between 1980 and 2007, this paper finds that relatively abundant factor's endowments of Colombia (labor and land) have a positive effect on Colombia's trade flows. As a result, we do not find enough empirical support to reject the neoclassical theory of international trade, and it particular the Heckscher-Ohlin-Samuelson theorem.

Keywords : Heckscher-Ohlin Model; Neoclassical Theory of International Trade; Methodological Falsacionism; Gravity Model; Panel Data.

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