AP Micro & MacroInternational & Development Economics
Rybczynski Theorem
The Rybczynski theorem says that, at constant prices, increasing one factor's endowment raises output of the good using it intensively more than proportionally and reduces output of the other good.
Another pillar of the Heckscher-Ohlin model, it shows how factor growth reshapes production. If a country's capital stock grows (or it gains labor through immigration), the capital-intensive industry expands disproportionately while the labor-intensive industry actually contracts in absolute terms, holding goods prices fixed. It is used to analyze the effects of investment, immigration, and emigration on a trading economy's output mix.