The Heckscher-Ohlin model cannot explain United States-Mexico trade since the United States has more labor and more land than Mexico.

Question

Quizplus · Accepted Answer

The Heckscher-Ohlin model does not solely rely on differences in labor and land endowments to explain trade patterns. It also takes into consideration differences in capital endowments as well as differences in technology and preferences. Therefore, the model can still be used to analyze and explain trade patterns between countries with similar factor endowments.

The Heckscher-Ohlin Model Cannot Explain United States-Mexico Trade Since the United