ABSTRACT
Trade analysts have usually chosen to explain inter-industry patterns of specialization and trade in terms of differences in the economic characteristics of trading partners. Such an approach is found in the first section of this chapter, where the relationship between factor endowments and net trade is examined for a large number of countries. The results of that investigation are used in the second section to assess the extent to which a generalized version of the H-O theory provides an explanation for patterns of world trade.
