International Trade and Shift-Share Analysis: A Response to Dinc and Haynes

Abstract

In this article, in response to the Dinc and Haynes comment, the authors correct their published formulation of the import/export disaggregated dynamic shift-share analysis used to characterize differential metropolitan employment growth rates in the United States. The empirical results of the analysis and the inferences drawn from them in their 1997 EDQ article remain valid. The authors contrast the formulation they used with that suggested by Dinc and Haynes, pointing out the differential treatment of productivity in each. They maintain that separating productivity gains from the trade-related components is preferable to the Dinc and Haynes assumption of proportional gains, because successful exporting sectors are more apt to post superior productivity growth rates than are import-vulnerable sectors. The authors show that the results of the two versions are otherwise equivalent.