Shifting patterns of comparative advantage : manufactured exports in developing countries

Labor intensive goods are the strongest export items for developing countries - and the United States is the developing countries'biggest market. In 1965 the National Bureau of Economic Research predicted that developing countries would specialize in the manufacture and export of labor intensive goods - and prepared a list of those goods. A study of actual exports for 1965 - 1986 revealed that with few exceptions, export performance of those labor-intensive goods was superior in developing countries - which increased their market shares for those items despite generally declining shares of world trade. The United States absorbed nearly 55 percent of labor intensive products in 1986. And more than 40 percent of total U.S. imports of labor intensive goods came from developing countries. Many of the products the National Bureau identified as labor intensive remain so, and therefore remain suitable for production and export by developing countries. Clothing, footwear, leather products, wood manufactures, and some primary metal manufactures became relatively more labor intensive; so producers in industrial countries can expect increased competition from the developing countries in these products in the 1990s.