Factor Proportions and the Structure of Inter-Regional Trade: The Case of Japan

Abstract

results.1 However, there exists little evidence in economic literature to support an alternative hypothesis of the pattern of trade based on the Heckscher-Ohlin (H-O) theory. The hypothesis, stated in a simple version amenable to empirical investigation, is that a country's exports require in their production a relatively intensive use of the country's relatively abundant factor of production.2 As is well known, Leontief [12; 13] found that the U.S. exports of 1947 and 1951 were generally more labor-intensive (relative to capital) than the corresponding competitive imports, contrary to what may be expected on the basis of the H-O theory. Subsequent investigations by other writers into the trade patterns of additional countries resulted in mixed (mostly negative)