Deriving the factor endowment--commodity output relationship for Thailand (1920-1927) using a three-factor two-good general equilibrium trade model

TL;DR

This paper derives the factor endowment-commodity output relationships for Thailand (1920-1927) using a three-factor two-good general equilibrium model, challenging previous assumptions about labor's impact on rice and textile outputs.

Contribution

It develops Rybczynski sign patterns for Thailand during 1920-1927 using the EWS-ratio vector, refining previous models and providing new insights into factor-output relationships.

Findings

Labor stock may not positively influence export sector share.

Chinese immigration's impact on population growth was less than expected.

Results suggest previous assumptions about factor effects on output may be incorrect.

Abstract

Feeny (1982, pp. 26-28) referred to a three-factor two-good general equilibrium trade model, when he explained the relative importance of trade and factor endowments in Thailand 1880-1940. For example, Feeny (1982) stated that the growth in labor stock would be responsible for a substantial increase in rice output relative to textile output. Is Feeny's statement plausible? The purpose of this paper is to derive the Rybczynski sign patterns, which express the factor endowment--commodity output relationship, for Thailand during the period 1920 to 1927 using the EWS (economy-wide substitution)-ratio vector. A 'strong Rybczynski result' necessarily holds. I derived three Rybczynski sign patterns. However, a more detailed estimate allowed a reduction from three candidates to two. I restrict the analysis to the period 1920-1927 because of data availability. The results imply that Feeny's statement might not necessarily hold. Hence, labor stock might not affect the share of exportable sector in national income positively. Moreover, the percentage of Chinese immigration in the total population growth was not as large as expected. This study will be useful when simulating real wage in Thailand.