Brazil and south africa trade pattern

Brazil and South Africa Trade Pattern – H-O Theorem and Leontief Paradox

By桑露

Contents
1. Abstract 3
2. Introduction 4
3. Findings 5 The Factor-Proportions Theorem 5 Leontief Paradox 5
4. South Africa and Brazil Profiles 6 Socioeconomic Characteristics 6 Brazil and South Africa Commercial Relations 7
5. H-O Analysis 9 Brazil and South Africa Trade Pattern 13
6. Conclusion 18
7. Bibliography 19

Brazil and South Africa Trade Pattern

Abstract

This study aims to use H-O theory and Leontief findings to test which of these theories will successfully explain the real trade pattern between Brazil and South Africa. This paper uses the data collected from the period 2009-2010 to make an empirical analysis. To explain each country abundance data of labor force and capital were extracted from Worlds bank database.
The paper shows the growing trade currency between Brazil and South Africa with the main objective of using H-O theory and Leontief paradox to explain the commercial relations of these two nations that are emerging power in the world´s economy.

Key Words: Leontief Paradox; Heckscher-Ohlin theorem; Brazil and South Africa trade pattern.

Introduction

This study is based on the theory Heckscher-Ohlin theorem, its biggest findings was the theory that countries export goods that use inputs in their production of which the country is most well-endowed. And, contrary, the country imports goods they use in their production inputs that he has in abundance. Here, this theory is discussed from a different point comparing real data of trade goods of two countries Brazil and South Africa.
Brazil is and South Africa trade is an interesting case study for some similarities of each countries developing process, as both countries are large developing economy with quite diverse exports and imports.
Leontief contributed to H-O Theorem by empirically testing trade theory. Leontief study US trade pattern and found that the US was an