The new trade theory is at variance with which of the following theories,which suggests that a country will predominate in the export of a product when it is particularly well endowed with those factors used intensively in its manufacture?

Question

Quizplus · Accepted Answer

The new trade theory deviates from the Heckscher-Ohlin theory, which argues that a country tends to specialize in products that require factors of production, such as land, labor, or capital, that the country has in abundance. The new trade theory, on the other hand, suggests that economies of scale, network effects, and product differentiation can also be significant determinants of a country's export patterns. Therefore, the correct choice is (A) Heckscher-Ohlin.

The New Trade Theory Is at Variance with Which of the Following