Rybczynski Theorem:
The Rybczynski theorem demonstrates the relationship between changes in national factor endowments and changes in the outputs of the final goods within the context of the H-0 model. Briefly stated, according to this theorem an increase in a country's endowment of a factor will cause an increase in output of the good, which uses that factor intensively, and a decrease in the output of the other good. In other words, if India experiences an increase in labour supply, then that would cause an increase in output of the labour-intensive goods, like textiles, and a decrease in the output of the capital-intensive goods, like electronics. The reverse is true if the economy's capital stock increases. The theorem is useful in addressing issues such is investment, population growth, labour force growth, immigration and emigration, all within the con- text of the H-0 model.