The factor in a country’s endowment (primary factors of production) of which it is has the highest reservoir relative to other factors, and in comparison to other countries. This factor may be defined in terms of quantity or price. Economic theory suggests that each nation would have competitive advantage in the good(s) that intensively use its abundant factor(s)- its comparative advantage goods. With free trade, each nation will specialize in and export its goods that are produced using such abundant factors.
In economics, comparative advantage is determined by the interaction of the factor abundancies of nations and the factor-intensities of products. Therefore, it can change for a given nation if its relative factor abundancy changes relative to other nations or if technological changes bring about alterations in the factor-intensity properties of particular products.
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