Can the traditional international trade theory be applied to service trade?

It can be used for reference and has some enlightening effect, but it can't be directly misappropriated without modification. Traditional trade theory focuses on trade in goods; In the past 20 years, both service trade and investment trade have developed rapidly. The traditional theoretical framework and analytical methods still have certain reference value, but they lack pertinence and rationality.

What are the traditional international trade theories?

Traditional international trade theories mainly include theory of absolute advantage, H-O-S model, comparative advantage theory or comparative advantage theory.

1, Ricardo's comparative advantage theory, that is, countries engage in specialized production that is conducive to improving the conditions of commodity exchange, and through international exchange, the income and welfare of countries can be improved. The theory of comparative advantage mainly emphasizes that countries have different functional characteristics in demand and supply. The division of labor between countries, that is, specialized production, can develop different technologies. Therefore, even with the same labor force, the production functions of different countries are different, so that the economies between countries will be divided and perform their duties.

2. The main conclusion of H-O-S theory is that a country mainly exports products produced by its relatively abundant and cheap production factors, while importing products produced by its relatively scarce production factors.

3. The H-O-S (Eli Heckscher-Bertil Ohin-Paul Semuelson) model is a model of two countries, two commodities and two resource endowments. The main premise assumptions are as follows:

1) The production factors are homogeneous, or the technical level of production is the same, so the production function of products is the same. 2) The scale reward of production remains unchanged. 3) It conforms to the premise assumption of the perfectly competitive market model. 4) Make full use of production factors. 5) The factors of production are different in different countries, so the factor intensity of commodities is different, which is generally labor-intensive and capital-intensive.

However, as early as 1953, Leontief, an American economist, found that the capital/labor ratio of American imported products was >: the capital/labor ratio of American exported products. That is to say, as a developed country with rich capital, the United States exports labor-intensive products and imports capital-intensive products, which is inconsistent with H-O-S's theoretical prediction and is called "Leontief's mystery". Leontief's discovery completely overthrew the empirical basis of traditional international trade theory.