Question

What are Factor Endowments and how do they guide a country's trade practices? How does the Porter Diamond guide a country's into producing certain products? What conclusions can you derive from Heckscher, Ohlin and Porter and how would you advise a country who has hired you to bring it into the global marketplace?

Answer 1

Factor endowments are the land, labor, capital, and resources that a country has access to, which will give it an economic comparative advantage over other countries.
Factor endowments determine a country's comparative advantage and what to manufacture or specialize an economy on.
The Porter Diamond helps to understand the competitive advantage that nations or groups possess due to certain factors available to them, and to explain how governments can act as catalysts to improve a country's product output.