Flow of Trade and Factor Intensity
Because it is difficult to determine the factor intensity in different industries and because goods of the same category have different characteristics, sometimes we cannot explain the trade patterns that occur between countries using the Heckscher-Ohlin theory. Would you expect the U.S. or Germany to be an exporter of chemicals? Which country actually does export chemicals? Which type of chemicals? Notice that the United States and the United Kingdom import and export goods of the same type. Can the Heckscher-Ohlin theory explain this?
Data: The Census Bureau’s site at http://www.census.gov/foreign-trade/sitc1/ gives bilateral trade data about chemicals and related products.
