Is There a Trade and Defense Perimeter? The Regional Impacts of Trade and Defense Spending in the United States, 1978‐1986

Abstract

Using an expanded shift share technique to impute international trade-related industrial job change, the extent to which structural changes in trade and defense spending appear to explain state economic performance differentials is explored. The findings show there is limited support for the "trade perimeter" argument, but strong support for the hypothesized relationship between military procurement spending and state trade performance. To the extent that defense commitments, especially to private sector procurement and R & D, have operated as an informal industrial policy, particularly by guaranteeing strong domestic sales, they have enabled a significant number of states peripheral to the traditional industrial heartland to build a strong international trade posture. The conclusion offers observations on the economic development implications of these findings.

Foreign Industrial Exports and State Manufacturing Performance

“…state and regional economies has fostered a large and growing literature on globalization and regional economic change. Major areas within this literature concern the regional dimensions of changing patterns of international trade (e.g., Erickson 1989;Noponen et al 1996), foreign investment (e.g., Glickman and Woodward 1989;Leichenko and Erickson 1997), international production (e.g., Noponen et al 1993), and trade policy (e.g., Glasmeier et al 1993). Within the sub-area focused on international trade, many issues have been explored including factors that determine state foreign export patterns (Erickson and Hayward 1992;Coughlin and Fabel 1988), the geographical structure of state foreign trade (Erickson and Hayward 1991), and the contribution of foreign trade and changing trade policies to regional economic change (Kuehn and Braschler 1986;Zech 1986;Manrique 1987;Erickson 1989;Markusen et al 1991;Warf and Cox 1993;Hayward 1995;Noponen et al 1996).…”

Estimating population change with a two-category shift-share model

“…The accounting approach continues to be central to many empirical studies of the North American space-economy. Recent applications have been evident in studies addressing the rural decentralization of high-technology industries across the U.S. (Barkley 1988), manufacturing performance in Quebec (Andrikopoulos et al 1990), and the links that exist between defense spending and trade positions of U.S states (Noponen et al 1996). In a more sophisticated study, shift-share has been integrated with data envelopment methods and input-output analysis to assess the relative efficiencies of industries within the state of Virginia (Dinc and Haynes 1999).…”

City Systems and Industrial Market Structure

“…By 1992, however, the national map exhibits less east-to-west variation, with Atlanta and San Diego now closer to the national norm but St. Louis below the national average. This latter event is no doubt the consequence of the historic dominance of the aerospace and defense industries within the St. Louis economy and the decline of this sector throughout the midwest in the 1980s (Ó hUallacháin 1987;Naponen et al 1996).…”