journal article Show Economía Vol. 3, No. 1 (Fall, 2002) , pp. 41-109 (69 pages) Published By: Latin American and Caribbean Economic Association (LACEA) https://www.jstor.org/stable/20065432 Read and download Log in through your school or library Journal Information Economía is a semi-annual journal from the Latin American and Caribbean Economic Association (LACEA) that provides a forum for influential economists and policymakers from the region to share high-quality research directly applied to policy issues. AbstractAccording to the classical theory of international trade, countries specialise in producing those goods in which they have a comparative advantage over their competitors, and then obtain their other commodity requirements by exchanging domestically produced goods for imports which they are not able to produce economically themselves. Historically the trade of the countries of the Middle East has tended to conform to this pattern, although, increasingly, government regulation of economic affairs has meant that the trade flows predicted by classical laissez-faire models have tended to be distorted. A country’s comparative advantage in the production of a particular commodity is of course determined by what is usually referred to as its ‘factor endowment’, or in other words, the local availability of resources such as labour, agricultural land, mineral resources, capital or technology. Thus, for example, Egypt which has abundant cheap labour, and a good supply of fertile irrigated land, has specialised in cotton production for which its climate is well suited, and for over a century has traded cotton exports for imports of manufactured goods.1 Similarly, for hundreds of years Iran has specialised in carpet production, with the skilled weavers of Tabriz and Isfahan using local wool from the mountains. Neighbouring Iraq has specialised in dates,while in North Yemen the main export has been coffee. Keywords
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Copyright information© 1977 Rodney Wilson About this chapterCite this chapterWilson, R. (1977). The Factor Endowment. In: Trade and Investment in the Middle East. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-03299-0_1 Download citation
What is meant by factor endowments?What Is a Factor Endowment? A factor endowment represents how many resources a country has at its disposal to be utilized for manufacturing—resources such as labor, land, money, and entrepreneurship.
Who provided the factor endowment theory of international trade?The theory was developed by the Swedish economist Bertil Ohlin (1899–1979) on the basis of work by his teacher the Swedish economist Eli Filip Heckscher (1879–1952).
What is factor abundance in economics?The idea behind factor abundance is that the ratio of one factor to other factors in a country is greater than the same ratio for all other countries.
What are basic and advanced factor endowments?Factor endowments include land, natural resources, labor, and the size of the local population. Michael E. Porter argued that a nation can create new advanced factor endowments such as skilled labor, a strong technology and knowledge base, government support, and culture.
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