What does the 'Heckscher-Ohlin Model' of international trade emphasize as the primary determinant of trade patterns?

💡 Solution & Explanation

The Heckscher-Ohlin trade model posits that international trade patterns are determined by cross-country differences in factor endowments such as capital and labor abundance. Nations specialize in exporting goods that intensively utilize their relatively abundant factors. This theory expands upon David Ricardo's classical comparative advantage model by introducing multiple factors of production.