When the impact of differences of technology on productivity is controlled for, Heckscher-Ohlin theory gains predictive power.

Question

Quizplus · Accepted Answer

New research shows that once differences in technology across countries are controlled for, countries do indeed export those goods that make intensive use of factors that are locally abundant, while importing goods that make intensive use of factors that are locally scarce. In other words, once the impact of differences of technology on productivity is controlled for, the Heckscher-Ohlin theory seems to gain predictive power.

When the Impact of Differences of Technology on Productivity Is