The Structural Determinants of the US Competitiveness in the Last Decades: A 'Trade-Revealing' Analysis

We analyze the decline in the U.S. share of world merchandise exports against the backdrop of a model-based measure of competitiveness. We preliminarily use constant market share analysis and gravity estimations to show that the majority of the decline in export shares can be associated with a declining share of world income, suggesting that the dismal performance of the U.S. market share is not a sufficient statistic for competitiveness. We then derive a computable measure of country-sector specific real marginal costs (i.e. competitiveness) which, insofar it is inferred from actual trade ows, is referred to as 'revealed'. Brought to the data, this measure reveals that most U.S. manufacturing industries are losing momentum relative to their main competitors, as we find U.S. revealed marginal costs to grow by more than 38% on average. At the sectoral level, the "Machinery" industry is the most critical. JEL Classification: F12, F17, F19

[1]  D. Novy.  Gravity Redux: Measuring International Trade Costs with Panel Data , 2011, SSRN Electronic Journal.

[2]  M. Waugh,et al.  International Trade and Income Differences , 2010 .

[3]  Benjamin R. Mandel,et al.  The revealed competitiveness of U.S. exports , 2010 .

[4]  Giordano Mion,et al.  Productivity and Firm Selection: Quantifying the ‘New’ Gains from Trade , 2012 .

[5]  G. Ottaviano,et al.  The Euro and the Competitiveness of European Firms , 2009 .

[6]  Harald Fadinger,et al.  Trade and Sectoral Productivity , 2011 .

[7]  P. Pagano,et al.  Trade-Revealed TFP , 2009 .

[8]  T. Mayer,et al.  The erosion of colonial trade linkages after independence I , 2009 .

[9]  J. Whalley,et al.  Regionalization, Changes in Home Bias, and the Growth of World Trade , 2007 .

[10]  Massimo Del Gatto,et al.  Trade Integration, Firm Selection and the Costs of Non-Europe , 2006 .

[11]  Philippe Martin,et al.  Make Trade Not War? , 2005 .

[12]  G. Ottaviano,et al.  Market Size, Trade, and Productivity , 2005, World Scientific Studies in International Economics.

[13]  Matthias Sydow,et al.  Competitiveness and the Export Performance of the Euro Area , 2005, SSRN Electronic Journal.

[14]  R. Feenstra,et al.  World Trade Flows: 1962-2000 , 2005 .

[15]  Scott L. Baier,et al.  The growth of world trade: tariffs, transport costs, and income similarity , 2001 .

[16]  James E. Anderson,et al.  Gravity with Gravitas: A Solution to the Border Puzzle , 2001 .

[17]  T. Mayer,et al.  Non-Europe: The magnitude and causes of market fragmentation in the EU , 2000 .

[18]  Jacques-François Thisse,et al.  Agglomeration and Trade Revisited , 2002, World Scientific Studies in International Economics.

[19]  J. Richardson.  Constant-market-shares analysis of export growth☆ , 1971 .