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Business
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| Number of pages / Number of words: |
8 / 2182 |
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It could then trade its excess for a greater quantity of the second good than it could have obtained had it split its production between the two goods.
These theories of trade were followed by Hecksher and Ohlin's theory of factor proportions (1933), which suggested that countries will specialize in the production and trade of either capital-intensive products or labor-intensive products, depending on whether their comparative advantage lies in capital or labor...
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Other theories of trade include Vernon's product cycle theory, which suggests that a country's comparative advantage in products changes over time as the technology to produce that product changes, and Porter's writings on the competitive advantage of nations, according to which a nation's competitive industries depend on domestic rivalry, demand conditions, factor conditions, and the strength of related and supporting industries...
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