Do Exchange Rates and Foreign Incomes Matter for Exports at the State Level?

Cronovich, Ron; Gazel, Ricardo

doi:10.1111/0022-4146.00114

Cited by 20 publications

(14 citation statements)

References 19 publications

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“…Turning to the trade variables, we included in the models both contemporaneous values and one-year lagged values for all four trade variables. One-year lags were included since prior research suggested that the effects of trade on regional economies may not necessarily be felt immediately because of the resistance of prices and wages to downward pressures, lags in new invest-ments, and other factors (Leichenko 2000;Cronovich and Gazel 1998). Our results for the trade exchange-rate variables are generally more consistent than for the tradeorientation variables.…”

Section: Results For All Statesmentioning

confidence: 51%

Regional Income Inequality and International Trade

Silva

Leichenko²

2004

Economic Geography

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This study investigates the effects of trade on income inequality across regions in the United States. Using both structural and price‐based measures of regional trade involvement, we evaluate the effects of trade on inequality within and across states, the metropolitan and nonmetropolitan portions of the states, and the major census regions. Across all states and metropolitan and nonmetropolitan areas, we found that trade affects inequality primarily via import and export prices. In contrast to our expectations, however, a weaker dollar—more expensive imports and cheaper exports—is associated with the worsening of a state's position relative to other states and greater inequality within the state. Across the census regions, both our price and orientation measures had significant effects, but the direction of these effects varied by region. Whereas many regions benefited from cheaper imports, states in regions that are traditionally home to low‐wage sectors, including the Southeast and South Central regions, were made relatively worse off by lower import prices and by greater orientation toward import‐competing goods. Our findings reinforce notions about the uneven impacts of globalization and suggest that policy measures are needed to ensure that both the benefits and costs of involvement in international trade are shared across regions.

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Section: Results For All Statesmentioning

confidence: 51%

Regional Income Inequality and International Trade

Silva

Leichenko²

2004

Economic Geography

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“…One approach uses regression analysis to estimate the extent to which foreign incomes affect state exports. These studies, exemplified by Erickson and Hayward (1991), Cronovich and Gazel (1998), and Coughlin and Wall (2003), find a strong, statistically significant relationship.…”

Section: Uneven Income Growthmentioning

confidence: 97%

The Increasing Importance of Proximity for Exports from U.S. States

Coughlin¹

2004

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over time, then its trade is becoming more (less) intense with nearer countries relative to countries farther away. In other words, a declining (increasing) distance of trade means that the shares of a country's (state's) trade with nearby trading partners is rising (falling) relative to trade with its more distant trading partners. The analysis begins by summarizing the facts and the explanations concerning the geographic distribution of exports throughout the world. An important feature of the economic geography of trade flows is the distance that separates a state from its trading partners. Distance is generally thought to play a key role in the geographic distribution of trade for two reasons. First, transportation costs are higher for longer distances. Second, the costs of accessing information about foreign markets and establishing a trade relationship in those markets are higher for longer distances. 2 Thus, a country's trade with more distant countries is deterred. Despite the "death of distance" associated with the communications revolution, proximity appears to be increasingly important for trade flows. 3 Using the bilateral trade flows of 150 countries, Carrere and Schiff (2004) find that during 1962-2000 the distance of (non-fuel merchandise) trade declines for the average country and that countries with a declining distance of trade were twice as numerous as those with an increasing distance of trade. After reviewing the geography of exports from the perspective of individual countries throughout the world, I examine the geography of the exports 2 See Rauch (1999) for additional discussion of this point. 3 The death of distance has become a popular term because of The Death of Distance: How the Communications Revolution Will Change Our Lives by Frances Cairncross (1997). The book focuses on the economic and social importance of how advances in technology have virtually eliminated distance as a cost in communicating ideas and data. Possibly, this death of distance has made foreign direct investment and trade with proximate countries a more efficient way to serve markets than trade over long distances.

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“…Previous studies have found a considerable degree of variation in trade‐related effects across the U.S. Carlino, Cody, and Voith (1990) and Cronovich and Gazel (1998) find that the impacts of exchange rate movements vary in the U.S. at the state level. Moreover, Krugman (1991) and Shelburne and Bednarzik (1993) find that manufacturing sectors involved in trade tend to be more spatially concentrated than other, non‐traded sectors.…”

Section: Introductionmentioning

confidence: 97%

International Trade and the Changing Demand for Skilled Workers in High‐Tech Manufacturing

Silva

2008

Growth and Change

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States and localities in the U.S. put considerable effort into attracting and maintaining high-tech manufacturing industries to preserve manufacturing employment. However, little work has examined whether high-tech industries respond differently than traditional manufacturing to changing trade pressures. This study investigates the impact of international trade on skilled and unskilled labor demand across manufacturing sectors. Results of this study indicate that changes in exchange rates and trade orientation have similar effects across high-tech and traditional manufacturing sectors. In addition, findings suggest that there is a high degree of variation in the trade-related effects on labor demand across individual high-tech sectors, and that the direction of these effects often runs counter to the predictions of traditional trade theory. Copyright (c) 2008 Blackwell Publishing.

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Do Exchange Rates and Foreign Incomes Matter for Exports at the State Level?

Cited by 20 publications

References 19 publications

Regional Income Inequality and International Trade

Regional Income Inequality and International Trade

The Increasing Importance of Proximity for Exports from U.S. States

International Trade and the Changing Demand for Skilled Workers in High‐Tech Manufacturing

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