Determinants of U.S. Textile and Apparel Import Trade

where:

TEXIMPiust   = value of annual textile/apparel imports (in million dollars) by the United

States from the exporting country i;

GDPit        =     Gross domestic product of the exporting country i;

GDPust       =     Gross domestic product of the United States

PCIit         =     Per capita income of the exporting country i;

PCIust        =     Per capita income of the United States;

EXRATEiust   = Exchange rate of the currency of country i to the U.S. dollar;

PRICEDust    =      Price deflator (proxy for inflation rate) of the U.S.;

PRICEDit    =     Price deflator of the exporting country i;

DISTius       =     Distance in kilometers between the exporting country i and the U.S.;

DMFA it     =     Dummy variable identifying whether country i was free from trade

restraint (1 if country i was free from restraint in year t, and 0 otherwise);
and
εiust            = error term

t            = time (1989 - 2003)

Data Sources and Estimation Procedure

The empirical evaluation of equation 9 is based on secondary data obtained from the
following sources: (i) GDP, exchange rate, price deflators and population for the calculation of
per capita GDP were obtained from the International Marketing Data and Statistics (2004); (ii)
distance in kilometers between the U.S. and the exporting country was obtained from the
research aid website of the Macalester College of Economics at www.macalester.edu/research;
and (iii) trade values were obtained from the United States International Trade Commission’s
trade data website at www.dataweb.usitc.gov. Textile and apparel trade values, classified in SIC
code 22 and 23, respectively, were used for years 1989-1996. The new NAIC code, which
commenced in 1997, was used for the years 1997-2003. Under this new industrial code, NAIC
313 and 314 are specified as equivalent to the old SIC code 22 (for textile products); and NAIC
315 is equivalent to SIC 23 (for apparel products).

10

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