The factor-proportions theory is built around differences in factor endowments and different input requirements for each good.

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The factor-proportions theory, also known as the Heckscher-Ohlin theory, posits that countries will export goods that require production factors (inputs) that are relatively abundant locally and import goods that require production factors that are relatively scarce, highlighting the role of differences in factor endowments and input requirements in shaping trade patterns.

The Factor-Proportions Theory Is Built Around Differences in Factor Endowments