factor endowments

Factor endowments refer to the natural resources, labor, capital, and technology that a country possesses, which are used to produce goods and services. These resources influence what a country can efficiently produce and export. For example, land-rich countries may produce agriculture, while those with advanced technology might focus on high-tech industries. Essentially, factor endowments shape a nation’s comparative advantage, affecting its trade patterns and economic development. They are the foundational assets that determine how a country participates in the global economy.