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Shift-share analysis and international trade

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  • Shu-hen Chiang

Abstract

In today’s global economy, increased international market integration and a steep rise in the number of multinational enterprises have made the notion of there being no international trade bizarre indeed. This paper revises the shift-share analysis by adopting the net export ratio (NX) to separate the domestic and foreign components of regional employment change and to show the revealed comparative advantage of international trade. The result is found that the effects of international trade on employment change are ubiquitous, and its importance therefore cannot be overlooked. As for the significantly positive values of NX and its relative growth, for example, the employment change mainly arises from the international market and not from domestic demand. This modification makes the shift-share analysis more reasonable and sensible, especially in relation to a small open economy. Copyright Springer-Verlag 2012

Suggested Citation

  • Shu-hen Chiang, 2012. "Shift-share analysis and international trade," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 49(3), pages 571-588, December.
    • Handle: RePEc:spr:anresc:v:49:y:2012:i:3:p:571-588
    DOI: 10.1007/s00168-011-0465-1
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    References listed on IDEAS

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    1. Heizi Noponen & Ann Markusen & Karl Driessen, 1998. "International Trade and Shift-Share Analysis: A Response to Dinc and Haynes," Economic Development Quarterly, , vol. 12(4), pages 344-350, November.
    2. Mustafa Dinc & Kingsley Haynes, 2005. "Productivity, International Trade and Reference Area Interactions in Shift‐Share Analysis: Some Operational Notes," Growth and Change, Wiley Blackwell, vol. 36(3), pages 374-394, June.
    3. Alex Hoen & Jan Oosterhaven, 2006. "On the measurement of comparative advantage," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 40(3), pages 677-691, August.
    4. Shu-hen Chiang, 2009. "Location quotient and trade," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 43(2), pages 399-414, June.
    5. Run Yu & Junning Cai & Matthew Loke & PingSun Leung, 2010. "Assessing the comparative advantage of Hawaii’s agricultural exports to the US mainland market," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 45(2), pages 473-485, October.
    6. David Wadley & Phillip Smith, 2003. "Straightening up shift-share analysis," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 37(2), pages 259-261, May.
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    Cited by:

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    2. Qiang Li & Jason F. Kovacs & Geun Hee Choi, 2021. "High-technology employment growth in China: geographic disparities in economic structure and sectoral performance," Economic Change and Restructuring, Springer, vol. 54(4), pages 1025-1064, November.
    3. Satyendra Nath Chakrabartty & Deepankar Sinha, 2024. "Assessing Direction of India’s Exports: A Dynamic Framework," Journal of Asian Economic Integration, , vol. 6(1), pages 63-89, April.
    4. Raisa Țăruș & Ștefan Dezsi & Andreea M. Crăciun & Florin Pop & Claudia E. Tudorache, 2022. "Urban Shrinking Cities in Romania and The Netherlands—A Possible Policy Framing," Sustainability, MDPI, vol. 14(10), pages 1-23, May.
    5. Uwe Blien & Lutz Eigenhueller & Markus Promberger & Norbert Schanne, 2013. "The Shift-Share Regression: An Application to Regional Employ-ment Development," ERSA conference papers ersa13p614, European Regional Science Association.

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    More about this item

    Keywords

    R11; F11;

    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade

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