IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/17916.html
   My bibliography  Save this paper

Evaluating Estimates of Materials Offshoring from U.S. Manufacturing

Author

Listed:
  • Robert C. Feenstra
  • J. Bradford Jensen

Abstract

When materials offshoring is measured by estimating imported intermediate inputs, a common assumption used is that an industry's imports of each input, relative to its total demand, is the same as the economy-wide imports relative to total demand: this is the so-called "import comparability" or "proportionality" assumption. A report to the National Research Council identified this assumption as being a significant limitation of current data collection and analysis. In this note we move beyond this assumption to obtain a direct measure of imported materials by industry for the United States in 1997. At the 3-digit I-O industry level, there is a correlation of 0.68 between the offshoring shares made with and without the proportionality assumption, and a higher correlation of 0.87 when the shares are value weighted. While most value-weighted industry have differences below 50 percentage points in the two estimates, there is significant number of cases that differ by 10 percentage points or more.

Suggested Citation

  • Robert C. Feenstra & J. Bradford Jensen, 2012. "Evaluating Estimates of Materials Offshoring from U.S. Manufacturing," NBER Working Papers 17916, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:17916
    Note: ITI
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w17916.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Deborah Winkler, William Milberg, 2009. "WP 2009-12 Errors from the “Proportionality Assumption†in the Measurement of Offshoring: Application to German Labor Demand," SCEPA working paper series. 2009-12, Schwartz Center for Economic Policy Analysis (SCEPA), The New School.
    2. Feenstra, Robert C. & Jensen, J. Bradford, 2012. "Evaluating estimates of materials offshoring from US manufacturing," Economics Letters, Elsevier, vol. 117(1), pages 170-173.
    3. Puzzello, Laura, 2012. "A proportionality assumption and measurement biases in the factor content of trade," Journal of International Economics, Elsevier, vol. 87(1), pages 105-111.
    4. Susan Houseman & Christopher Kurz & Paul Lengermann & Benjamin Mandel, 2011. "Offshoring Bias in U.S. Manufacturing," Journal of Economic Perspectives, American Economic Association, vol. 25(2), pages 111-132, Spring.
    5. Andrew B. Bernard & J. Bradford Jensen & Peter K. Schott, 2009. "Importers, Exporters and Multinationals: A Portrait of Firms in the U.S. that Trade Goods," NBER Chapters, in: Producer Dynamics: New Evidence from Micro Data, pages 513-552, National Bureau of Economic Research, Inc.
    6. Robert C. Feenstra & John Romalis & Peter K. Schott, 2002. "U.S. Imports, Exports, and Tariff Data, 1989-2001," NBER Working Papers 9387, National Bureau of Economic Research, Inc.
    7. Robert C. Feenstra, 1996. "U.S. Imports, 1972-1994: Data and Concordances," NBER Working Papers 5515, National Bureau of Economic Research, Inc.
    8. Susan N. Houseman, "undated". "Offshoring and Import Price Measurement," Upjohn Working Papers snh20111, W.E. Upjohn Institute for Employment Research.
    9. Timothy Dunne & J. Bradford Jensen & Mark J. Roberts, 2009. "Producer Dynamics: New Evidence from Micro Data," NBER Books, National Bureau of Economic Research, Inc, number dunn05-1, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Justin Pierce & Peter Schott, 2009. "A Concordance Between Ten-Digit U.S. Harmonized System Codes and SIC/NAICS Product Classes and Industries," Working Papers 09-41, Center for Economic Studies, U.S. Census Bureau.
    2. Robert C. Feenstra & Robert E. Lipsey & Lee G. Branstetter & C. Fritz Foley & James Harrigan & J. Bradford Jensen & Lori Kletzer & Catherine Mann & Peter K. Schott & Greg C. Wright, 2010. "Report on the State of Available Data for the Study of International Trade and Foreign Direct Investment," NBER Working Papers 16254, National Bureau of Economic Research, Inc.
    3. Campbell, Douglas L., 2020. "Relative Prices and Hysteresis: Evidence from US Manufacturing," European Economic Review, Elsevier, vol. 129(C).
    4. Antrà s, Pol & Yeaple, Stephen R., 2014. "Multinational Firms and the Structure of International Trade," Handbook of International Economics, in: Gopinath, G. & Helpman, . & Rogoff, K. (ed.), Handbook of International Economics, edition 1, volume 4, chapter 0, pages 55-130, Elsevier.
    5. Robert C. Johnson, 2018. "Measuring Global Value Chains," Annual Review of Economics, Annual Reviews, vol. 10(1), pages 207-236, August.
    6. Lawless, Martina & Siedschlag, Iulia & Studnicka, Zuzanna, 2017. "Expanding and diversifying the manufactured exports of Irish-owned enterprises," Research Series, Economic and Social Research Institute (ESRI), number BKMNEXT335, August.
    7. Stephen J. Redding & David E. Weinstein, 2017. "Aggregating from Micro to Macro Patterns of Trade," NBER Working Papers 24051, National Bureau of Economic Research, Inc.
    8. Simon Schulte & Arthur Jakobs & Stefan Pauliuk, 2021. "Relaxing the import proportionality assumption in multi-regional input–output modelling," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 10(1), pages 1-21, December.
    9. Campbell, Douglas L. & Lusher, Lester, 2019. "The impact of real exchange rate shocks on manufacturing workers: An autopsy from the MORG," Journal of International Money and Finance, Elsevier, vol. 91(C), pages 12-28.
    10. Andrew B. Bernard & J. Bradford Jensen & Stephen J. Redding & Peter K. Schott, 2018. "Global Firms," Journal of Economic Literature, American Economic Association, vol. 56(2), pages 565-619, June.
    11. Ahn, JaeBin & Choi, Moon Jung, 2020. "From firm-level imports to aggregate productivity: Evidence from Korean manufacturing firm data," Japan and the World Economy, Elsevier, vol. 56(C).
    12. Teixeira, Aurora A.C. & Tavares-Lehmann, Ana Teresa, 2014. "Human capital intensity in technology-based firms located in Portugal: Does foreign ownership matter?," Research Policy, Elsevier, vol. 43(4), pages 737-748.
    13. Armando Silva & Oscar Afonso & Ana Africano, 2013. "Economic performance and international trade engagement: the case of Portuguese manufacturing firms," International Economics and Economic Policy, Springer, vol. 10(4), pages 521-547, December.
    14. Andrew B. Bernard & Marco Grazzi & Chiara Tomasi, 2010. "Intermediaries in International Trade: direct versus indirect modes of export," LEM Papers Series 2010/19, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    15. Joakim Gullstrand & Karin Olofsdotter & Susanna Thede, 2016. "Importers, Exporters and Multinationals: Exploring the Hierarchy of International Linkages," Open Economies Review, Springer, vol. 27(3), pages 495-514, July.
    16. Jörn Kleinert & Nico Zorell, 2010. "Export-Magnification Effect of Offshoring," IAW Discussion Papers 63, Institut für Angewandte Wirtschaftsforschung (IAW).
    17. Elhanan Helpman & Oleg Itskhoki & Marc-Andreas Muendler & Stephen J. Redding, 2017. "Trade and Inequality: From Theory to Estimation," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 84(1), pages 357-405.
    18. William F. Lincoln & Andrew H. McCallum & Michael Siemer, 2017. "The Great Recession and a Missing Generation of Exporters," Finance and Economics Discussion Series 2017-108, Board of Governors of the Federal Reserve System (U.S.).
    19. Vincenzo Verardi & Joachim Wagner, 2021. "Productivity Premia for German Manufacturing Firms Exporting to the Euro-area and Beyond: First Evidence from Robust Fixed Effects Estimations," World Scientific Book Chapters, in: Joachim Wagner (ed.), MICROECONOMETRIC STUDIES OF FIRMS’ IMPORTS AND EXPORTS Advanced Methods of Analysis and Evidence from German Enterprises, chapter 7, pages 87-109, World Scientific Publishing Co. Pte. Ltd..
    20. Gerard Hoberg & S. Katie Moon, 2019. "The Offshoring Return Premium," Management Science, INFORMS, vol. 67(6), pages 2876-2899, June.

    More about this item

    JEL classification:

    • F1 - International Economics - - Trade

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:17916. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.