Growth, Factor Endowment and Trade of India - A Review of Literatures

Abstract

The factor endowment theorem better known as the Heckscher - Ohlin Theorem has been much been researched topic in the arena of International Trade. The H-O theorem envisages that trade between different countries is caused due to differences in relative factor endowments of those countries. H-O theorem is a theorem of long term general equilibrium in which the two factors are mobile between sectors. Leontief was the first to find that despite the fact that the USA was capital-abundant country it was exporting labour-intensive products. This clearly indicated factor reversal in the case of USA and popularly came to be known as Leontief paradox. This very study instigated the researchers all over the world to test H-O theorem for other countries. This paper is an attempt to review literatures related to the studies on growth, factor endowment and trade of India.