factor endowment

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Factor Endowment

The means of production (namely land, labor, capital and sometimes entrepreneurship) contained in an area. In general, greater factor endowment portends greater economic success. However, some resource-poor countries and regions become successful simply by efficient use of the little factor endowment they have.

factor endowment

the FACTORS OF PRODUCTION that a country has available to produce goods and services. The size and quality of a country's resource base (natural resources, labour and capital) determine the amount of goods and services it can produce (see GROSS NATIONAL PRODUCT) and the rate at which it can raise living standards over time (see ECONOMIC GROWTH). Differences between countries in terms of the availability and sophistication of their resource inputs provide an incentive for them to engage in INTERNATIONAL TRADE in order to obtain products that they cannot make efficiently for themselves.
References in periodicals archive ?
This equilibrium is unstable, though, because we are considering a situation in which Home is more skilled-labor-abundant than Foreign, and the initial condition for factor endowments is given by a point such as A.
VFDI flows between two countries will not occur unless factor endowments are sufficiently different.
Krugmen (1983 and 1990) has intertwined "firm-specific variables" and "country-specific variables" (factor endowments), which generate transaction cost incentives through integration of up-stream and down-stream activities (inside a firm and within the country), and movement of MNCs across national boundaries arise from unequal factor endowments to reap the benefit of unequal factor prices.
On the other hand, it suggests that we need to understand better how to alter factor endowments when societies may not have the internal will to do so.
Or are differences in growth explained by the historical pattern of settlement between so-called settler colonies or conquest ones, or are there different local factor endowments which would influence these outcomes?
Beyond that, for given factor endowments, an expansion of the output of the labor-intensive exportable sector requires contraction of the output of the import competing good.
A technological change is considered as a real occurrence, and, for given factor endowments, it leads to an increase in the conventional measure of real GDP.
template was shaped by egalitarian institutions (a commitment to equality of opportunity); by the factor endowments of the New World (lots of land relative to labor); and by republican ideology, meaning democracy and pluralism.
Unintended Consequences: The Impact of Factor Endowments, Culture, and Politics on Long-Run Economic Performance
By totally differentiating expression (2) holding the world price of both tradeables and factor endowments constant we thus obtain:
Alternatively, international trade may be derived from a similarity of economic factors other than those associated with the availability of factor endowments (Balassa 1986).
Because of factor endowments and their own shortsightedness, landowners would continue to seek surplus value from exploitation of tenant sharecroppers rather than through modernization and increased production.