In “Determinants of the Commodity Structure of U.S. Trade” by Robert E. Baldwin, Summary of findings: Baldwin’s work has typically focused on international trade, and in his article, he evaluated the factors that influence the composition of the U.S. trade. His findings include the following factors: Analysis of the type of goods that the U.S. exports and imports, the factors influencing changes in the commodity structure of U.S. trade, such as trade policies, digital advancement, and change in consumer preferences, and lastly, the role of comparative advantage in shaping the U.S. trade portfolio, suggesting that many researchers trying to find the relationship between capital-intensive and labor-intensive have contended that Hercher-Ohlin’s theory has provided a proposition. Baldwin’s research chiefly focuses on international trade, analyzing the “determinants commodity structure of U.S. trade.”

In “The Relative Sophistication of Chinese Export” by Peter K. Schott, Summary of findings. Schott’s research always investigates the issues involved in international trade, mainly in China. His article describes the sophistication and complexity of Chinese exports, how they evolved, and the factors influencing China’s export capabilities and competitiveness. China has committed to varying its preferences in international trade with the help of low wages and penetrating the United States market. China produces and exports labor-intensive products to the U.S. market. Schotts also stated that since “China is considered an intensive country, it produces large quantities of intermediate products and exports them into the world market, leading to a sharp reduction in the price of the intermediate products, thus causing the wages of low-skill workers to decrease across countries that produce toys.” Schott’s “relative sophistication of Chinese export” delves into the issues related to international trade, specifically how China emerges as a strong international player.

Empirical Evidence and Hechscher Ohlin Model

According to Krugman, Obstfeld & Melitz (2018), the Hechscher-Ohlin model advocates that countries export capital-intensive products they make intensive use of their abundant factors of production and import products that are labor-intensive that they make intensive use of their scarce factors of production. Whether these findings provide empirical evidence for or against the Hechscher-Ohlin model, it is essential to consider whether the factors influencing the commodity of the U.S. trade and the sophistication of Chinese exports align with his model’s prediction. In the two articles, the findings provide complex analyses that do not fully support the idea that the U.S. mainly exports products consistent with its abundant factors of production and imports products that align with its scarce factors of production. However, the findings reveal that trade patterns are influenced by technological advancement, consumer preferences, and government policies, which are not entirely driven by factors such as endowments. In this case, the findings partially support the Hechscher-Ohlin model.

Because empirical evidence indicates that the real world is more complex than the simplified assumptions of economics models, some factors involved, such as economies of scale, non-homogeneous goods and transportation costs, can change the trade patterns between the U.S. and China. Krugman, Obstfeld & Melitz (2018) argue that the Hechscher-Ohlin model “remains vital for understanding the effects of trade.” While the Hechscher-Ohlin model provides a valuable framework for understanding trade, it may not fully describe the complex factors of real-world dynamics. The findings in these articles can improve and expand the understanding of real-world dynamics, but they would not provide a complete picture of the complexity of international trade.

In conclusion, the findings in these articles provide nuanced insight into U.S. trade and Chinese exports. Still, they have not fully aligned with the simplification of the Hechscher-Ohlin model because of the various complexities influencing real-world trade. The Hechscher-Ohlin model argues that countries will export goods that use their abundant factors of production, such as capital and labor and import goods that use their scarce factors of production. It offers valuable insights into the relationship between resource endowment and trade patterns through the comparative advantage of intensive factors.

References

Baldwin, E. R. (1971). Determinants of the commodity structure of the U.S. trade. The American Economic Review. https://eds-s-ebscohost-com.ezproxy.ccu.edu/eds/detail/detail?vid=0&sid=dee32b1a-afe9-44a6-ad70-dd6225822eb5%40redis&bdata=JnNpdGU9ZWRzLWxpdmU%3d#db=edsjsr&AN=edsjsr.1910546

Schott, K. P. (2008). The relative sophistication of Chinese exports. Economic Policy. https://eds-s-ebscohost-com.ezproxy.ccu.edu/eds/detail/detail?vid=0&sid=88ea239c-bc39-48f6-af89-c22421fcab8f%40redis&bdata=JnNpdGU9ZWRzLWxpdmU%3d#AN=27968426&db=buh 

Krugman, P., Obstfeld, M. & Melitz, M. (2018). International trade: theory and policy (11^th ed.). Pearson. https://plus.pearson.com/courses/urn:xl-hed:course:7628489/products/JRCHCPFJGO1/pages/a841fbbb6b4dcae92d730bdf1a9d51f3c1e563423-id_toc14?locale=&key=271877128147379269142023