Evidence on Shifts in the Determinants of the Structure of United States Manufacturing Foreign Trade, 1958-1976.

The steadily increasing importance of manufacturing foreign trade to the United States economy has made it essential for researchers to attempt to underst and how the structural determinants of that trade may have changed in the recent past and how they may be expected to change in the future. This dissertation provides important evidence in this regard. It examines changes in the industry characteristics of U.S. manufacturing net exports, exports, and imports over the period 1958-1976. The characteristics considered are the raw labor, physical capital, human capital, and advanced technology intensities of a large and comprehensive set of manufacturing industries. The disaggregated empirical analysis proceeds in two major steps. First, the coefficients of linear regressions of the various trade performance variables on factor intensities in separate annual cross-sections are compared for statistically significant changes over time. Second, several econometric techniques which have been designed to test for parameter constancy are extended to the pooled cross-section, time-series context. Of particular interest is the extension of the cumulative sums of recursive residuals (CUSUM) procedures. The analysis is refined by considering various industry subgroups and a variety of econometric models. The major results were as follows. First, the three-factor model of U.S. manufacturing net exports was largely supported, with comparative advantage being marked by the intensive use of human capital and comparative disadvantage being marked by the intensive use of raw labor. Second, there was a significant decline in the unskilled labor content of net exports. Third, the human capital intensity of net exports rose over the period, although the human capital content of imports fell. There was some evidence that the physical capital content of net exports declined at the same time. Fourth, U.S. comparative advantage came to be increasingly characterized by the intensive use of advanced technological inputs. Finally, nearly all the indicated shifts were of a gradual nature, spread rather evenly over the mid-1960's to the early 1970's. In general, there are suggestions that factor endowment changes across countries, shifts in commercial policy, and technological progress were behind the trends in comparative advantage which have been noted.PhDCommerce-BusinessUniversity of Michiganhttp://deepblue.lib.umich.edu/bitstream/2027.42/158687/1/8204710.pd