Global1

Testing the Heckscher-Ohlin Model

Global Economics I

1st Semester 2015/2016

Abstract

This paper propose is to test the Heckscher-Ohlin theorem, having in mind the Leontief

Paradox. We will try to verify this theorem by analysing four countries (Cambodia, Canada,

Denmark, and Thailand) and four factors (labor, capital, land and trademark applications). As

the theorem suggests, each country will export the good that uses intensively the factor of

production it has in abundance and will import the other goods. We concluded that our results

contradict the H-O model, how it has happened with Leontief.

Group members:

Ana Sofia Ferreira (nº11971)

Leonor Fialho Almeida (nº11874)

Pedro Carvalho (nº12588)

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1. Introduction

Having in mind the Leontief Paradox presented by Feenstra and Taylor on International

Economics, the propose of this paper is to test the H-O model.

The H-O Theorem states that with two goods and two factors, each country will export the

good that uses intensively the factor of production it has in abundance and will import the other

good.

Leontief has tested the Heckcher-Ohlin theorem and concluded that United States – the most

capital abundant country in the all world in 1953 – exported labor intensive goods and imported

capital intensive goods, and this result was a contradiction relatively to what the H-O theorem

predicts.

The research was based on various articles, among which we can emphasize the working paper

of Dalia Hakura “A Test of the General Validity of the Heckscher-Ohlin Theorem for Trade

in the European Community”, where it is said that the H-O theorem has been a dominant

paradigm in trade theory, with weak empirical support. Hakura suggests a modified model

which improves the traditional model in what concerns the prediction of trade flows. With these

researches and the Leontief’s paradox, we will try, using four countries and four factor

endowments, reach conclusions that allow us to conclude whether we agree or not with the

theorem.

Not only will we take into account the two main factors that are always taken into account,

labor and capital, as we will also analyse land and trademark applications. We will study the

values of these factors in the following countries: Cambodia, Canada, Denmark and Thailand.

The choice of these countries was not random.

Cambodia was chosen because despite of their low incomes, it is one of the fastest growing

economies among Asian countries in the last decade, although it continues to be one of the

poorest Asian countries. Another factor that led us to this choice was the fact that agriculture

is the dominant sector in the economy and this may be related to our land factor;

Canada was chosen due to the fact of being a developed country and one of the wealthiest in

the world. This country is well known for its well-developed international trade networks, so

this is an important;

Denmark’s choice was because of its characteristics: it has a high-income economy, and it is

one of the countries in the world with the highest ratio of people with tertiary education. This

last characteristic can be relevant for us to see the effective productivity of labor compared

with the rest of the chosen countries;

Thailand was one of our choices because it is known by its emerging economy and also

because it is considered a newly industrialised country.

The overall results will be interesting not only because we are analysing countries from

different parts of the world (North America, Europe, and Asia) and which are known for their

performance in different sectors but also to see if our initial expectations will correspond to our

final conclusions.

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2. Data

In this paper, the data is related to four countries, as pronounced in the previous introduction.

Those are Cambodia, Denmark, Canada and Thailand. Furthermore, all data presented concerns

the year 2010, since is the year in which the results found are more consistent and complete.

In order to make a reliable assessment for this essay, for the evaluation of factor endowments,

were used the following variables: labor force, land area, gross capital formation and trademark

applications.

Labor force, the first variable, regards to people older than 15 years who supply labor for the

production of goods and services during a limited period (definition of economically active

population to the International Labor Organization). The labor force includes the unemployed,

but excludes homemakers and other unpaid caregivers and workers in the informal sector.

The second variable, land area, is a country´s total area, excluding area under inland water

bodies, exclusive economic zones and national claims to continental shelf.

The other variable, gross capital formation, involves outlays on additions to the fixed assets

of the economy plus net changes in the level of inventories. Fixed assets include land

improvements, plant, machinery and equipment purchases and the construction of roads,

railways, schools, offices, hospitals, private residential dwellings, and commercial and

industrial buildings. Inventories are stocks of goods held by firms to meet temporary or

unexpected fluctuations in production or sales.

The last variable, trademark applications, which are applications to register a trademark with

a national or regional Intellectual Property (IP) office. A trademark provides protection to the

owner of the mark by ensuring the exclusive right to use it to identify goods or services.

For a better understanding of the variables and to effectuate a more consistent study, it is

important to consider the values of GDP. GDP at purchaser’s prices is the sum of gross value

added by all resident producers in the economy plus any product taxes and minus any subsidies

not included in the value of the products.

In what concerns to labor force and gross capital formation, it is expected that the country with

a high proportional labor force, is a labor abundant country; as the country with a high

proportional gross capital formation, is expected to be capital abundant.

The used data was found in the Database from the World Bank and Trade Center Bank.

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3. Factor Endowments

As previously stated, our analysis will be made taking into account the following factors: labor

force, gross capital formation, land area and trademark applications. We will study data from

2010 in order to measure if any of the countries we have chosen is abundant in a certain factor.

To be able to measure this, we included in our analysis the share of world GDP relative to

2010 in order to have a comparison measurement. In order to see if a country is abundant in a

certain factor we will compare its share of that factor with its share of world GDP. To make

this analysis easier we used the following equation to calculate the percentage of factor

abundance.

%Factor abundance = %Country Factor - %World GDP

Given this, if the share of factor abundance of a factor is higher than zero this means that the

country in question is that factor abundante, otherwise, if the share is below zero the country is

not factor abundante relatively to that factor.

As was said, to measure the abundance of each factor, was made a comparison between the

shares of the countries’ factors with the share of the world GDP that each country held in 2010,

as can be seen in the appendix 2.

Thailand shows the highest share in terms of labor force, which can be explained by the high

quantity of population (approximately 64,785,909 of persons). Canada has the second highest

share in terms of labor, but with a significant difference respect to Thailand, since Canada has

almost half the population of Thailand (a population with 33,476,688). Following, Cambodia,

with almost the triple of population than Denmark that is the country with the lowest share of

labor force.

In terms of land area, it is similar to the labor force, but, in this case, Canada is the country

with the highest share of land area.

In what concerns to trademark applications and gross capital formation, Canada is the country

with highest shares, what it is expected, since it is a developed and rich country, with the highest

GDP among the others and has a great combination of the other last two factors. Thailand and

Denmark are the following countries with higher shares of trademark applications and gross

capital formation, what make sense, since they are the countries that have a higher GDP next

to Canada, with very similar values. Cambodia, although it has relatively high values of land

area and labor force, it is known has a poor country and has the lowest GDP among these four

countries.

In short, Canada has highest share of all factors, except labor force, since it is a large country,

with great levels of development.

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After using the indicated formula, as it can be seen in appendix 3, it is clear that Thailand is a

significantly labor abundant country (with the highest percentage among the other countries),

what corresponds with the analysis previously made. The same happens in what concerns to

trademark applications and gross capital formation – it is an abundant country in these two

factors and the one with the highest percentages, what is expected since it has a well-developed

infrastructure, a free-enterprise economy and pro-investment policies. Historically had a strong

economy due in part to competitive industrial and agricultural exports. It also has full

employment and high revenues from tourism. It is a scarce country in terms of land area, what

it is not a surprise, since, although it was the second country with more land area among these

four countries, it only had a share of 0.393783075 sq/km (comparing with the world land area).

About Canada, it is clearly the most abundant country in terms of land area, what makes sense,

since it is the biggest country, has seen before. Surprisingly, it is a scarce country in all other

factors. These conclusions does not make sense, since Canada as a high-tech industrial society

in the trillion-dollar class and resembles the US in its market-oriented economic system, pattern

of production, and high living standards.

Even more astonishing, it is the fact that Denmark is scarce in all the four factors. It would

make sense his scarcity in land area and labor force, but, in terms of trademark applications

and gross capital formation, it should be an abundant country, since it is known has one of the

most developed countries in the world, with a high standard of living and an economy

characterized by extensive government welfare measures and an equitable distribution of

income. Denmark is a net exporter of food and energy and enjoys a comfortable balance of

payments surplus. With that economy and high level of education and living standards,

Denmark should be an abundant country in terms of trademark applications and gross capital

formation.

Contrasting with Denmark and with the expected results, Cambodia is abundant in trademark

applications. This result does not make much sense, since Cambodia is one of the poorest

countries in Asia and his long-term economic development remains a daunting challenge,

inhibited by endemic corruption, limited educational opportunities, high income inequality and

poor job prospects. In agreement with these facts, Cambodia is scarce in respect to gross capital

formation. It is an abundant country in terms of labor what corresponds with the previous

results, since it has relatively large population. About his abundance in land area, it is dubious,

since Thailand has a higher land area and it is scarce in this factor.

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4. Effective factor endowments

In this section, we propose ourselves to transform two of our four endowments, labor and land,

into an effective term. To do so, we have done what its definition says and we multiplied the

actual factor endowment times its productivity.

Once again, if the share of an effective factor is higher than the value of the share of the world

GDP we must conclude that the country is that factor abundant, otherwise it is that factor scarce.

One of the endowments that we propose to improve was the labor force. To do that, we got an

equation to calculate the effective labor force (appendix 5) and on that we got into consideration

one factor that, for us, might be a way to get better results and that is correlated with

productivity. In our opinion, the life expectancy at birth is a factor that it is correlated with

the labor force, meaning this that some of the features that improve the life expectancy are the

same that improve the productivity of the labor force.

Effective Labor Force = Life Expectancy at Birth (total) * Labor Force

We might say that these factors were not the best ones to measure the effective labor force, but,

due to the data that we had available, we thought that it was a good proxy variable. If we could

have access to all the information needed, we think that one of the best ways to measure this

new factor was through the ratio between total output and total hours worked by man.

Our analysis is relatively to year 2010 and we can say that Cambodia is effective labor

abundant, since its share (0.23%) is higher than the share of the world’s GDP (0.02%). This

result is in agreement with the result reached when we were only considering the labor force.

Relatively to Canada, we may say that it is not labor abundant since the share of effective labor

force (-1.78%) is below the share of the world’s GDP (2.46%) and this continues to agree to

what we have observed in the previous section. Denmark is also not effective labor abundant,

having a share of -0.39 in contrast to a share of 0.49 of world’s GDP. As like it happens in the

case of Cambodia, Thailand is also effective labor abundant. Its share of effective labor force

(0.80%) is above of its value of the share of the world’s GDP (0.49%). In terms of abundance,

there was no change between when we were considering labor force and effective labor force.

The other factor endowment that we proposed to improve was land area. To do so, we thought

of the agricultural land in terms of land area to get the new measure of land area: the

effective land area. The agricultural land refers to the share of land area that is arable and, in

our opinion, this might be considered as one important factor which shows the factor

productivity.

Effective Land Area = Agricultural Land (% of land area) * Land Area

The following step in our analysis was to compare each country’s share of effective land area

and compare it with its share of world’s GDP (appendix 7). If the share of effective land area

was higher than the share of world’s GDP of the country in question, this country was land

7

abundant; if the share of effective land area was below the world’s GDP of the country, this

was land scarce.

Again, our analysis was made having in mind the values for 2010. In 2010, Cambodia had

0.1% of effective land area, which is higher than its share of the world’s GDP (0.02%), meaning

this that Cambodia was land abundant in effective land area. This result is in agreement with

the result we got in section 3, where the share of land area was 0.12%. Canada was the only

country where the new result is not in agreement with what we got before. In the section of

factor endowments, Canada had a share of land area of 4.54% which was higher than the share

of world’s GDP (2.46%) and, as we have concluded before, it was land abundant. After the

rearrangement of our new factor endowment, the share of effective land area decreased to -

1.17%, value that it is now lower than the share of world’s GDP. The results in the other two

countries, Denmark and Thailand, were not surprising, continuing to be in agreement with the

results we got in the previous section. The value of the share of the effective land area for

Denmark was -0.43% which is lower than 0.49% (the share of world’s GDP), showing us that

this country is not land abundant. The same for Thailand, its share of effective land area (-

0.06%) was below the value of its share of world’s GDP (0.49%). So, we can conclude that

Thailand is land scarce.

Overall results are according to what we initially expected. There were no major changes

compared to the conclusions we got in the section of factor endowments. The only change was

in Canada that before the calculation of the effective factor endowment was land abundant and

after it was land scarce. Relatively to the other countries, we can say that Cambodia was the

only country in our sample that was also land and labor abundant; Canada and Denmark were

also labor and land scarce; and Thailand was labor abundant and labor scarce.

8

5. Abundance and trade pattern

To analyse the trade pattern of each country we considered the trade balance of three products

that use intensively each factor. If the sum of the trade balances that use intensively each factor

is positive (the country exports more than imports), we assume that that country specializes in

the production of that factor. Consequently, we select trade balances of goods that have a clear

relationship with the factor.

Land Intensive Products: Coffee, tea, mate and spices; Oil seed, oleagic fruits, grain, seed,

fruit, etc; Live trees, plants, bulbs, roots, cut flowers etc.

Labor Intensive Products: Ceramic products; Cotton; Other made textile articles, sets, worn

clothing, etc.

Trademark application Intensive Products: Electrical, electronic equipment; Essential oils,

perfumes, cosmetics, toiletries; Organic chemicals.

Capital Intensive Products: Iron and steel; Plastics and articles thereof; Machinery, nuclear

reactors, boilers, etc.

In the case of Cambodia, we can see (appendix 25, 29) that the trade balances of all factors are

negative, which means that the country will not specialize in any of these types of products.

Assuming that the Heckscher-Ohlin Model holds, we would not expect these results: as we

have seen before, Cambodia is abundant in labor, land and trademark applications, so the trade

balances of each factor should be positive, which does not happen. When we introduce the

corrections in labor and land, they maintain their abundance in Cambodia reinforcing the idea

that our results contradict the model.

The results reached in Canada (appendix 26, 29) are partially expected given our model:

Canada is scarce in labor, capital and trademark application and does not specialize in products

that are labor, capital and trademark application intensive (the trade balance of products that

use these factors intensively are negative). When we introduce the correction in the factor land

(which without a correction was abundant and, as the trade balance of factors that use land

intensively is positive, it was according to the model) we notice that it is not an abundant factor,

which means that, in this case, Heckscher-Ohlin Model does not hold.

In the case of Denmark, as we have seen in the previous chapters, we know that it is not

abundant in any factor, including after the corrections. So it would be expected, according to

the model, that the country would not specialize in any factor, but as we can see in the appendix

27, and 29, the country will have a positive trade balance in products that use intensively

capital, land and trademark application, which means that they will specialise on it. Such results

are not according to the model.

The results of appendix 28, Thailand are also partially expected given the model: capital is

abundant and the country specializes in products that use it intensively (the trade balance of

products that use capital intensively is positive). Land (both before and after the correction) is

scarce, which means that we could expect that the trade balance of goods that use intensively

9

land would be negative. Looking at the results we confirm that this happens. On the other hand,

labor (both before and after the correction) is abundant and trademark application is scarce, but

the trade balance related to products that use labor and trademark application intensively is

negative and positive, respectively, which contradicts the model.

All in all, we can conclude that the Heckscher-Ohlin Model does not hold in most of the cases.

These results are according to Leontief’s Paradox that states that the countries do not specialize

in the products which are factor abundant.

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6. Conclusions and Limitations

The aim of this paper, as it was mentioned before, was to test the Hecksher-Ohlin model and

to verify if what it predicts really happens in real life. If that does not happen, we would get

similar results to those Leontief got. In that case, countries would import, instead of export,

goods in which its production is intensive in factors abundant in the country.

To be able to do what we had initially proposed, we started by reading some articles which aim

also to test the H-O model. Starting from there, the next step was to choose the countries and

the endowments we would going to analyse. We explained the reasons that led us to choose

those elements and we collected the data that was relevant for us from the database World

Bank. All the data collected was referred to the year 2010.

After collecting the information we analyzed it and treat it so as to obtain results that were

important for our work (appendix 1, 2, 3). To measure if a factor endowment was abundant in

a country, we used a formula that allow us to compare the country’s share of that factor with

its share of world GDP. In this section, we got the following conclusions: Cambodia was labor,

land, and trademark applications abundant and capital scarce; Canada was only land abundant,

being scarce in what concerns the other three factor endowments; the Denmark’s analysis was

the most surprisingly, since this country was all factors scarce, what was not expected for a

such well developed country; in Thailand’s case, this country was labor, trademark and capital

abundant and land scarce.

In our next task we propose to improve two of the four factor endowments. The factors we

chose were labor and land. This improvement was to turn those factors into effective terms,

and to do so, we made some transformations. To make those transformations, we used proxy

variables to represent the productivity of each factor endowment and we multiplied it by its

actual factor endowment. The proxy variable that we chose for land was agricultural land (%

land area) and for labor was life expectancy at birth. The results we got were almost the same

as in the previous section, except for the case of Canada which completely changed in terms of

share of land area (before was land abundant and after the change was scarce).

In section 5, we propose to present relevant data on the trade pattern behavior of the four

countries, and that was what we did using Trade Center Database. If the trade balance of one

sector was positive, we assume that the country specializes producing that good. Consequently,

Cambodia does not specialize in any kind of product, Canada specializes in land intensive

products, Denmark specializes in capital, land and trademark application intensive products

and Thailand only specializes in capital intensive products. Moreover, this allowed us to study

if the Heckscher-Ohlin Model holds in ours examples, which, as we have seen above, does not

apply in any factor intensive products. Therefore, this model could not fully explain the trade

pattern of neither any factor intensive product nor country.

The major conclusion we can draw from this essay is that, mostly, and taking into account data

that we have chosen for 2010, the H-O model does not apply.

11

As in any other paper, the conclusions we have reached have their limitations. Access to all the

data we found relevant for the report was not always easy, and sometimes we had to stop using

it because there were some missing values. And in cases like the one described before, we had

to choose other factors, this applies to the proxy factor endowments we chose to calculate the

effective factor endowment.

Another limitation that we can refer is related to the fact that we only done our analysis to one

year (2010). If we had used more years to compare, we could have reached different results.

The same happens for the number of countries and factor endowments.

12

Appendix

Cambodia Canada Denmark Thailand World

GDP (current US$) 11242275199 1,61401E+12 3,19811E+11 3,18908E+11 6,54892E+13

Labor Force 7900746 18916946 2930964 39016537 3202172897

Land Area(sq. Km) 176520 9093510 42430 510890 129738943,1

Trademark applications, total 3969 45220 5750 37656 3516962

Gross capital formation (current US$) 1952519818 3,76724E+11 58900801906 82709000794 1,56893E+13

Agricultural land (% of land area) 32,03602991 6,957555443 61,89017205 41,2221809 37,77965869

Life expectancy at birth, total (years) 70,64336585 80,8934878 79,1 73,81378049 70,27451882

Effective Labor Force 558135290,2 1530257741 231839252,4 2879958098 2,25031E+11

Effective Land Area 5655000 63268600 2626000 21060000 4901492989

1 Data of selected countries and factor endowments, 2010

Cambodia Canada Denmark Thailand

GDP (current US$) 0,017166608 2,464549387 0,488341545 0,48696252

Labor Force 0,246730775 0,590753423 0,091530473 1,218439424

Land Area(sq. Km) 0,136057837 7,009082842 0,032704136 0,393783075

Trademark applications, total 0,112853082 1,285768797 0,163493379 1,070696812

Gross capital formation (current US$) 0,012444909 2,401151181 0,375420079 0,527168028 2 Country shares of selected factor endowments and of GDP, 2010


GDP (current US$) 0,017166608 2,464549387 0,488341545 0,48696252

Labor Force 0,229564167 -1,873795964 -0,396811072 0,731476904

Land Area(sq. Km) 0,118891229 4,544533455 -0,455637409 -0,093179445

Trademark applications, total 0,095686473 -1,17878059 -0,324848166 0,583734292

Gross capital formation (current US$) -0,004721699 -0,063398206 -0,112921466 0,040205508 3 Shares of factor abundance, 2010

4 Country factor abundance, 2010

-3 -2 -1 0 1 2 3 4 5

Labor Force

Land Area(sq. Km)

Trademark applications, total

Gross capital formation (current US$)

Country Factor Abundance

Thailand Denmark Canada Cambodia

13


Labor Force 0,246730775 0,590753423 0,091530473 1,218439424

Effective Labor Force 0,248025781 0,680020378 0,1030254 1,279804141

Land Area(sq. Km) 0,136057837 7,009082842 0,032704136 0,393783075

Effective Land Area 0,11537301 1,290802622 0,053575513 0,429665003 5 Shares of factor endowments and effective factor endowments, 2010

6 Share of factor endoments and effective factor endowments, 2010


GDP (current US$) 0,017166608 2,464549387 0,488341545 0,48696252

Effective Labor Force 0,230859172 -1,784529009 -0,385316145 0,792841621

Effective Land Area 0,098206402 -1,173746765 -0,434766032 -0,057297517 7 Country shares of effective factor endowments, 2010

8 Country factor abundance for effective factor endowments, 2010

0 1 2 3 4 5 6 7 8

Labor Force

Effective Labor Force

Land Area(sq. Km)

Effective Land Area


-2 -1,5 -1 -0,5 0 0,5 1

Effective Labor Force

Effective Land Area

Country Factor Abundance


14

9 Labor Force Denmark, 1990-2010

10 Labor Force Canada, 1990-2010

11 Labor Force Cambodia, 1990-2010

2650000

2700000

2750000

2800000

2850000

2900000

2950000

3000000

0

5000000

10000000

15000000

20000000

0

1000000

2000000

3000000

4000000

5000000

6000000

7000000

8000000

9000000

0

5000000

10000000

15000000

20000000

25000000

30000000

35000000

40000000

45000000

12 Labor Force Thailand, 1990-2010

15

11 Gross Capital Formation Cambodia, 1990-2010

12 Gross Capital Formation Canada, 1990-2010

13 Gross Capital Formation Denmark, 1990-2010

14 Gross Capital Formation Thailand, 1990-2010

0

5E+09

1E+10

1,5E+10

2E+10

2,5E+10

2004 2005 2006 2007 2008 2009 2010

0

5E+10

1E+11

1,5E+11

2E+11

2,5E+11

3E+11

3,5E+11

4E+11

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010

0

2E+10

4E+10

6E+10

8E+10

1E+11

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010

0

1E+10

2E+10

3E+10

4E+10

5E+10

6E+10

7E+10

8E+10

9E+10

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010

16

17 Land Area Canada, 1990-2010

18 Land Area Combodia, 1990-2010

19 Land Area Denmark, 1990-2010

20 Land Area Thailand, 1990-2010

0

2000000

4000000

6000000

8000000

10000000

0

50000

100000

150000

200000

19901992199419961998200020022004200620082010

42370

42380

42390

42400

42410

42420

42430

42440

19901992199419961998200020022004200620082010

0

100000

200000

300000

400000

500000

600000

19901992199419961998200020022004200620082010

17

21 Trademark applications Denmark, 2010

22 Trademark applications Thailand, 2010

23 Trademark applications Canada, 2010

24 Trademark applications Cambodia, 2010

0

2000

4000

6000

8000

10000

12000

14000

19

90

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91

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4500

18

Cambodia, 2010

TB (Thousand

US dollars)

Trade

balance

Labor Intensive Products

Ceramic products -31451

-213977 Cotton -124307

Other made textile articles, sets, worn clothing

etc -58219

Capital Intensive Products

Iron and steel -60937

-433412 Plastics and articles thereof -96217

Machinery, nuclear reactors, boilers, etc -276258

Land Intensive Products

Coffee, tea, mate and spices -186

-158 Oil seed, oleagic fruits, grain, seed, fruit, etc 1297

Live trees, plants, bulbs, roots, cut flowers etc -1269

Trademark aplication

Intensive Products

Electrical, electronic equipment -214998

-249797 Essential oils, perfumes, cosmetics, toileteries -19900

Organic chemicals -14899

25 Trade Balance Cambodia, 2010

Canada, 2010

TB (Thousand

US dollars)

Trade

balance



-1836342 Cotton -127075

Other made textile articles, sets, worn clothing

etc -788556



-30364505 Plastics and articles thereof -2314109

Machinery, nuclear reactors, boilers, etc -27415742



3893139 Oil seed, oleagic fruits, grain, seed, fruit, etc 4822190

Live trees, plants, bulbs, roots, cut flowers etc -62668


intensive products


-30050076 Essential oils, perfumes, cosmetics, toileteries -1198759


26 Trade Balance Canada, 2010

19

Denmark, 2010

TB (Thousand US

dollars) Trade balance



-229716 Cotton -42855

Other made textile articles, sets, worn clothing etc -87807



1128206 Plastics and articles thereof -1001200

Machinery, nuclear reactors, boilers, etc 2529654



101168 Oil seed, oleagic fruits, grain, seed, fruit, etc -24890

Live trees, plants, bulbs, roots, cut flowers etc 309679


intensive products


250759 Essential oils, perfumes, cosmetics, toileteries -169118

Organic chemicals 651592

27 Trade Balance Denmark, 2010

Thailand, 2010

TB (Thousand US

dollars) Trade balance


Ceramic products 31898

-165438 Cotton -405794

Other made textile articles, sets, worn clothing etc 208458



84857396 Plastics and articles thereof 2340667

Machinery, nuclear reactors, boilers, etc 92022219



-803406 Oil seed, oleagic fruits, grain, seed, fruit, etc -865206

Live trees, plants, bulbs, roots, cut flowers etc 97000


intensive products


-3984304 Essential oils, perfumes, cosmetics, toileteries 780892


28 Trade Balance Thailand, 2010

20


Labor Intensive Products -213977 -1836342 -229716 -165438

Capital Intensive Products -433412 -30364505 1128206 84857396

Land Intensive Products -158 3893139 101168 -803406

Trademark Application Intensive Products -249797 -30050076 250759 -3984304

29 Average Trade Balance for Factor Endowments, 2010

-40000000 -20000000 0 20000000 40000000 60000000 80000000 100000000




Trademark Application Intensive Products


30 Average Trade Balance for Factor Endowments, 2010

21

References

Hakura, Dalia (1999) “A Test of the General Validity of the Heckscher-Ohlin Theorem for

Trade in the European Community”, Internacional Monetary Fund. Retrieved from:

https://books.google.pt/books?id=Ie-

p7ubBs3AC&printsec=frontcover&dq=test+of+heckscher+ohlin+theorem&hl=en&sa=X&ve

d=0ahUKEwiDsO3q17bJAhVELhoKHc4LAtgQ6AEIHTAA#v=onepage&q=test%20of%20

heckscher%20ohlin%20theorem&f=false Acessed November, 2015

“Using International and Japanese Regional Data to Determine When the Factor Abundance

Theory of Trade Works”

Davis, Donald R.; Weinstein, David E.; Bradford, Scott C.; Shimpo, Kazushige (Jun.,1997)

“The American Review”, pp. 421-446. Retrieved from:

http://www.jstor.org/stable/2951353?seq=1#page_scan_tab_contents. Accessed November,

2015

“Multicountry, Multifactor Tests of the Factor Abundance Theory”

Bowen, Harry P.; Leamer, Edward E.; Sveikauskas, Leo (Dec.,1987) “The American

Economic Review”, pp.791-809. Retrieved from:

http://www.jstor.org/stable/1810209?seq=15#page_scan_tab_contents Accessed November,

2015

“The World Factbook - Canada”, Library, Central Intelligence Agency. Retrieved from:

https://www.cia.gov/library/publications/the-world-factbook/geos/ca.html Accessed

November, 2015

“The World Factbook - Cambodia”, Library, Central Intelligence Agency. Retrieved from:

https://www.cia.gov/library/publications/the-world-factbook/geos/cb.html Accessed

November, 2015

“The World Factbook - Denmark”, Library, Central Intelligence Agency. Retrieved from:

https://www.cia.gov/library/publications/the-world-factbook/geos/da.html Accessed

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“The World Factbook - Thailand”, Library, Central Intelligence Agency. Retrieved from:

https://www.cia.gov/library/publications/the-world-factbook/geos/th.html Accessed

November, 2015

http://data.worldbank.org/ Accessed November, 2015

http://www.intracen.org/itc/market-info-tools/trade-statistics/ Accessed November 2015

https://books.google.pt/books?id=Ie-p7ubBs3AC&printsec=frontcover&dq=test+of+heckscher+ohlin+theorem&hl=en&sa=X&ved=0ahUKEwiDsO3q17bJAhVELhoKHc4LAtgQ6AEIHTAA#v=onepage&q=test%20of%20heckscher%20ohlin%20theorem&f=false




http://www.jstor.org/stable/2951353?seq=1#page_scan_tab_contents



https://www.cia.gov/library/publications/the-world-factbook/geos/ca.html

https://www.cia.gov/library/publications/the-world-factbook/geos/cb.html

https://www.cia.gov/library/publications/the-world-factbook/geos/da.html

https://www.cia.gov/library/publications/the-world-factbook/geos/th.html

http://data.worldbank.org/

http://www.intracen.org/itc/market-info-tools/trade-statistics/

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