Question

Why does trade take place between the two countries heckscher ohnin approach in this regard

Answer 1

According to the Heckscher Ohnin Modal Theory trade between the two countries took place because one country has large population and labor resource and another has abundant capital but short of labor force. The former country would produce those goods at lower cost which involve labor intensive mode of production and the later would produce those goods which involve capital intensive mode of production. The former country would export its goods to the later and vice-versa and both the countries will have both types of goods at the least cost. In this way trade between the two countries takes place.