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Medical Transcription
and the HOS Theory by Ricci Mathew Is there a theoretical explanation
for the growth in Medical Transcription Outsourcing to India?
Yes indeed there is a cause and effect for everything and it
is believed that the HOS ( Heckscher-Ohlin-Samuelson ) theory
in economics has the explanation.
Recent literature has applied Heckscher-Ohlin-Samuelson (HOS)
theory of comparative advantage to explain international trade
in services.
Actually the theory originates from the Heckscher-Ohlin model
(H-O model) which is a general equilibrium mathematical model
of international trade and was developed by Eli Heckscher and
Bertil Ohlin. HOS theory is a variation of the H-O model and
states that comparative advantages are functions of their comparative
factor endowments.
The theory says that exports of a capital-abundant country will
be from Capital intensive industries, and labour -abundant countries
will import such goods, exporting labour intensive goods in
return. Therefore the relative abundance in capital will cause
the capital-abundant country to produce the capital-intensive
good cheaper than the labor abundant country and vice versa.
However there are certain basic assumptions of the HOS theory
about the concerned countries. These are that the countries
must have, Constant returns to scale, Have perfect competition,
There must be no factor intensity reversals, Incomplete specialization,
No economies of scale, Must have balanced trade Have similar
technologies / preferencesThe HOS theory has been reasonably
successful in explaining international trade and had indicated
years back that India was well positioned for medical transcription
outsourcing Click
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