Leontief's paradox in economics is that a country with a higher capital per worker has a lower

capital/labor ratio in exports than in imports. This econometric find was the result of Wassily W.
Leontief's attempt to test the Heckscher–Ohlin theory ("H–O theory") empirically.

Leontief's paradox in economics is that a country with a higher capital per worker has a lower
capital/labor ratio in exports than in imports.

This econometric find was the result of Wassily W. Leontief's attempt to test the Heckscher–
Ohlin theory ("H–O theory") empirically. In 1953, Leontief found that the United States—the
most capital-abundant country in the world—exported commodities that were more labor-
intensive than capital-intensive, contrary to H-O theory.[1] Leontief inferred from this result that
the U.S. should adapt its competitive policy to match its economic realities.

Which factors of production did Leontief focus on?

Leontief focused on the abundance of capital in the US, thus ignoring the abundance of land
present.
disputation of Heckscher-Ohlin theory
…they are known as the Leontief Paradox. …intensive, became known as the Leontief
Paradox because it disputed the Heckscher-Ohlin theory. Recent efforts in international
economics have attempted to refine the Heckscher-Ohlin model and test it on a wider range of
empirical evidence.
Leontief's paradox in economics is that a country with a higher capital per worker has a lower
capital/labor ratio in exports than in imports. This econometric find was the result of Wassily W.
Leontief's attempt to test the Heckscher–Ohlin theory ("H–O theory") empirically.

Ohlin. In Bertil Ohlin. …is now known as the Heckscher-Ohlin theory. The Heckscher-Ohlin theorem
states that if two countries produce two goods and use two factors of production (say, labour and
capital) to produce these goods, each will export the good that makes the most use of the factor that is
most abundant

Absolute advantage

Description
In economics, the principle of absolute advantage refers to the ability of a party to produce a
greater quantity of a good, product, or service than competitors, using the same amount of
resources.
Absolute advantage refers to the ability of a country to produce a good more efficiently than
other countries. In other words, a country that has an absolute advantage can produce a good
with lower marginal cost (fewer materials, cheaper materials, in less time, with fewer workers,
with cheaper workers, etc.).
Country Similarity Theory. The idea thatcountries with similar qualities are most likely to trade with

each other. ... The country similarity theory is based on the idea that economic actors with similar
qualities are going to want many of the same things.

Intra Industry – trade between two countries of goods produced by the same industry.

Ex. Japan exports Toyotas to germany

Germany export mercedez benz to japan