Heckscher-Ohlin Model
Unlike Ricardian Model, the model suggested by Heckscher-Ohlin assumes that there are two factors of production, namely, labor and capital.
One country has comparative advantage over the other because of the differences in relative amounts of each factor.
The model suggests that countries should produce and export goods using the resources that they have in abundance. Similarly, the countries should import goods that require resources that they have in short supply.
Note that this model differs from the comparative advantage theory that focuses on the efficiency of the production process. Because the country produces goods based on the resources that they have in abundance, it will be cheapest to produce these goods. Very broadly, countries that have more capital will specialize in capital-intensive goods and countries that countries with more labor will specialize in labor-intensive goods. These countries will trade these goods with each other.
This model assumes that labor and capital can flow freely between sectors and that the amount of these two factors differs among countries.
The model also assumes that in the long-run countries have same technology.