We formulate a simple model that captures two recent hypotheses: (i) that countries with an abundant absolute endowment of skilled labour will be net exporters in R&D- intensive industries; and (ii) that countries with a large domestic market will be net exporters in scale-intensive industries....

We show that when two countries are the same size then the country with stronger preferences in favour of domestic varieties of differentiated goods produced under increasing returns (IRS) will be the net exporter of that good. It is also shown that strong preferences for domestic varieties...

Applies the two-factor version of the Heckscher-Ohlin-Vanek (HOV) theorem. Two hypotheses are derived. The empirical analysis offers support for the second but not for the first hypothesis when trade of each Organization for Economic Co-operation and Development (OECD) country with the rest of...