According to the Factor Endowment Theory, a country that lacks one or more of the four major production factors-land, labor, capital, and entrepreneurship-will not be able to successfully participate in global trade.

The Factor Endowment Theory suggests that countries with an abundance of one or more of the four major production factors should specialize in producing goods and services that require those factors, and then trade with countries that have different factor endowments. However, countries that lack certain production factors can still participate in global trade by specializing in goods and services that require the factors they do have and importing goods and services that require the factors they lack.