Heckscher-Ohlin Theorem | Heckscher-Ohlin Model | H - O Model | International Economics | Trade

Heckscher-Ohlin theory, in economics, a theory of comparative advantage in international trade according to which countries in which capital is relatively plentiful and labour relatively scarce will tend to export capital-intensive products and import labour-intensive products, while countries in which labour is relatively plentiful and capital relatively scarce will tend to export labour-intensive products and import capital-intensive products. The theory was developed by the Swedish economist Bertil Ohlin (1899-1979) on the basis of work by his teacher the Swedish economist Eli Filip Heckscher (1879-1952). For his work on the theory, Ohlin was awarded the Nobel Prize for Economics (the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel) in 1977.