Sources of Comparative Advantages in Brazil

Based on the Heckscher-Ohlin-Vanek model, the authors investigate relative factor abundance in Brazil, as revealed by its international trade. They study two different time periods: one characterized by high trade barriers (1980–85) and the trade liberalization period (1990–95). Two alternative methodologies are used: the estimation of factor intensity regressions on net exports and the direct computation of factor content in net exports. In the factor intensity regression, the authors incorporate technological changes that might have occurred over time, and these turn out to be significant. Both methods yield the same results: the Brazilian international trade reveals relative abundance in capital, land, and unskilled labor, and scarcity in skilled labor, with qualitatively equivalent results for the two time periods studied.