Question

According to heckscher and ohlin basic cause of international trade is

Answer 1

In the modern Heckscher-Ohlin theory, these productivity differences themselves are traced to intercountry differences in initial factor endowments, which indeed are made to carry the entire burden of the explanation: the more obvious causesof the commodity composition offoreign trade, such as international 

Answer 2

According to heckscher and ohlin basic cause of international trade is

• Heckscher and Ohlin argue that disparities in factor-endowments (i.e., variances in supplies of all factors and not just labour efficiency) and varied factor-proportions required for various commodities are the causes of international trade.
• Key Learnings. The presence of government policies, variations in technology, variations in resource endowments, variations in demand, and the presence of economies of scale are the five primary drivers of international commerce.
• According to the Heckscher-Ohlin theorem, a country with ample capital (and labour) will export capital-intensive (and labor-intensive) goods and import labor-intensive (and capital-intensive) goods.
• With regard to the Heckscher-Ohlin theory of trade, six underlying assumptions are typically made: (1) There are no transportation costs or trade barriers (implicating that commodities are priced the same everywhere there is free trade), (2) The commodity and factor markets are completely competitive, and (3) All production functions are homogeneous.

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