Land-Labor Relationship
Land-Labor Relationship
On the basis of the factor-proportions theory, Sri Lankan authorities reasoned that they were likely to have a competitive advantage for products using large numbers of semiskilled workers. Labor was a production factor that they had in abundance.
The factor-proportions theory appears logical on the basis of a casual observation of worldwide production and exports. In countries where there are many people relative to the amount of land—for example, Hong Kong and the Netherlands—land prices are very high. Neither Hong Kong nor the Netherlands, regardless of their climate and soil conditions, excels in the production of goods requiring large amounts of land, such as sheep or wheat. These products are found in countries such as Australia and Canada where land is abundant relative to the number of people. Casual observation of manufacturing in relation to the labor-land proportions also seems to substantiate the theory. In, Hong Kong, for example, the most successful industries arejhose in which technology permits the use of a minimum amount of iand relative to the number qf_ people employedjLthere, clothing production is housed in multistoried factories in which workers share minimal space. jHong Kongjjoes not compete in the production of automobiles, which requires much more space per worker.
On the basis of the factor-proportions theory, Sri Lankan authorities reasoned that they were likely to have a competitive advantage for products using large numbers of semiskilled workers. Labor was a production factor that they had in abundance.
The factor-proportions theory appears logical on the basis of a casual observation of worldwide production and exports. In countries where there are many people relative to the amount of land—for example, Hong Kong and the Netherlands—land prices are very high. Neither Hong Kong nor the Netherlands, regardless of their climate and soil conditions, excels in the production of goods requiring large amounts of land, such as sheep or wheat. These products are found in countries such as Australia and Canada where land is abundant relative to the number of people. Casual observation of manufacturing in relation to the labor-land proportions also seems to substantiate the theory. In, Hong Kong, for example, the most successful industries arejhose in which technology permits the use of a minimum amount of iand relative to the number qf_ people employedjLthere, clothing production is housed in multistoried factories in which workers share minimal space. jHong Kongjjoes not compete in the production of automobiles, which requires much more space per worker.
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