Further empirical tests are required to substantiate or disprove the Heckscher-Ohlin theorem, because earlier tests were based on an incorrect test statistic. A multi-commodity, two-country, two-factor model is constructed to test the theorem and derive an appropriate test statistic. The model provides testable hypotheses for trade based on its profit and wage content rather than on its capital and labour content. The results show that the 1968 trade patterns for Australia, Ireland, Japan, Korea, New Zealand, and the United States support the HeckscherOhlin theorem, while those of Israel, Kenya, and the United Kingdom do not. Une etude empirique du theoreme Heckscher-Ohlin. Il faut des tests empiriques additionnels pour decider si l'on doit supporter ou renvoyer le theoreme de Heckscher-Ohlin puisque les tests anterieurs ont ete eriges sur une statistique incorrecte. Les auteurs developpent un modele de commerce international pour deux pays, deux facteurs de production et plusieurs biens afin de pouvoir confectionner un test approprie du theoreme. Le modele suggere des hypotheses veifiables construites a partir des variables profits et salaires plutot qu'a partir de variables comme les coefficients d'intensite en capital et en travail. Les resultats indiquent que les patterns de commerce en 1968 pour l'Australie, l'Irlande, le Japon, la Nouvelle-Zelande et les Etats-Unis tendent 'a supporter le theoreme Heckscher-Ohlin alors que 1'experience du Kenya et du Royaume-Uni va dans l'autre sens. Starting with Leontief's seminal paper (1953), examinations of the factoral content of international trade have cast doubt on the reliability of the Heckscher-Ohlin theorem. In these studies patterns of trade between the rest of the world and the United States, Japan, West Germany, and Canada contradicted the theorem, while those of East Germany and India supported it (Bharadwaj, 1962; Leontief, 1953, 1956; Roskamp, 1961; Stolper and Roskamp, 1961; Tatemoto and Ichimura, 1959; and Wahl, 1961). As Baldwin (1971, 126) stated, these results 'effectively destroyed the comfortable confidence of economists in the simple version of the Heckscher-Ohlin trade theory.' They also provoked numerous articles advancing other ways to account for the pattern of a country's trade. The test statistic used for these empirical studies of the Heckscher-Ohlin theorem was developed by Leontief and further applied by later investigators. Although it was never set within a theoretical framework, no one questioned it until Williams Canadian Journal of Economics / Revue canadienne d'Economique, XVII, no. 1 February / fevrier 1984. Printed in Canada / Imprime au Canada 0008-4085 / 84 / 0000-0032 $1.50 (? 1984 Canadian Economics Association This content downloaded from 157.55.39.104 on Mon, 20 Jun 2016 05:49:18 UTC All use subject to http://about.jstor.org/terms Empirical investigation of Heckscher-Ohlin theorem / 33 published his paper in 1970. In that work Williams asserted that 'Leontief's inference is incorrect; the United States is plentiful in capital,' and he provided a model from which he derived a correct test statistic (Williams 1970). From a practical point of view a major limitation of Williams's model is the assumption that trade is perfectly free and that factor prices will be equalized through trade. More recent papers by Deardorff (1979) and Brecher and Choudhri (1982) have suggested, in a two-country context at least, that the factor-content condition developed by Williams should hold when factor prices are unequal and there are tariffs or other impediments to trade. Marxsen (1983) has demonstrated that such is the case and therefore that the Williams' condition should hold, even if factor prices are unequal and trade is tariff-ridden. The purpose of this paper is to provide an empirical test of the Heckscher-Ohlin theorem. In the first section a multi-commodity, two-country, two-factor model is constructed, and an approprite test statistic is devised based on the profit and wage content rather than the capital and labour content of trade. The second section presents the empirical test results for the 1968 trade patterns of the nine countries under study. In the third section these results are considered in the light of previous work, and conclusions are drawn about the Heckscher-Ohlin theorem.