What does the 'Heckscher-Ohlin Model' of international trade state as the primary determinant of comparative advantage?

💡 Solution & Explanation

The Heckscher-Ohlin model explains international trade by emphasizing differences in national factor endowments, such as the relative abundance of labor and capital, predicting that a country exports goods intensive in its abundant factor. Other models, such as the Ricardian model, focus primarily on technological differences affecting labor productivity rather than factor proportions. Understanding this framework is crucial for conceptual questions in international economics.