ABSTRACT
This chapter employs an approach of Heckscher-Ohlin (H-O) extension, utilising Malaysian labour skills and trade data to examine the country's resource allocation in production and trade. It aims at investigating the skill intensity of Malaysia's trades, which shows skill content of exports and imports of manufactures. The manufacturing sector plays an important role in the economic development of Malaysia as evidenced by its contribution to gross domestic product (GDP), exports, and employment. The chapter looks at the skill content of the thirty-one Malaysian manufacturing industries, which produce flows of export and import. It explains the Leontief's method of analysing two-factor comparative advantage and followed by the D. B. Keesing's extension. The chapter describes the techniques used to calculate the skill intensity of Malaysia's production and trade flows. The empirical analysis focuses on the estimation of the level of 1994 employment in each of the classes of skills for producing the trade flows.
