Availability theory
A theory of the determinants of international trade, by Kravis (1956), says that countries import what they do not have available domestically and export what they do. The theory can be said to encompass explanations of trade that stress factor endowments, technological differences, and product differentiation.
Kravis’ Theory of Availability – In the Kravis’ (1956) 3 model, technological innovation as a basis of trade operates through his product availability hypothesis. The availability approach seeks to explain the pattern of trade in terms of domestic availability and non-availability of goods. Availability influences trade through demand and supply forces. According to him, a country produces and exports those goods which are ‘available’, that is, goods developed by its entrepreneurs and innovators. By availability, he means an elastic supply. In short, as per Kravis’ theory of availability, international trade takes place because of differences in the availability of certain products among countries.
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Patel A. (2017). International trade & economics law: theories of international trade and economics. Journal of Legal Studies and Research, 3(5), 8-9.