Factor endowments lie at the center of the Heckscher-Ohlin theory.

Question

Quizplus · Accepted Answer

The Heckscher-Ohlin theory is based on the premise that countries will specialize in producing goods that utilize their abundant factor of production and trade with other countries to acquire goods that utilize their scarce factor of production. Therefore, factor endowments, which refer to a country's relative abundance or scarcity of labor, land, and capital, form the basis of the theory.

Factor Endowments Lie at the Center of the Heckscher-Ohlin Theory