The Heckscher-Ohlin Theorem Of International Trade Theory: New Empirical Tests For Brazil

Abstract

Using Brazilian data, this paper empirically tests the Heckscher-Ohlin theorem. The results indicate that Brazil’s exports taken as a whole are more labor-intensive than its import substitutes, as predicted. However, this is largely due to the great capital-intensity of oil, accounting for half of all imports. In fact, some indicators show Brazil’s industrial exports as more capital-intensive than its non-oil imports, suggesting that not all Brazilian exports are labor intensive.