Internatonal Trade and Calforna Employment: Some Statstcal Tests Professor Dwght M. Jaffee Fsher Center for Real Estate and Urban Economcs Haas School of Busness Unversty of Calforna Berkeley CA 94720-1900 Tel: 510-643-6105 Emal: jaffee@haas.berkeley.edu (Second n a seres of workng papers on the general topcs of Foregn Trade and Calforna s Growth, by Dwght M. Jaffee, Cyntha A. Kroll, Ashok Deo Bardhan, Josh Krschenbaum, and Davd Howe) Workng Paper: 98-259 February 1998
Acknowledgement I want to express thanks to my colleagues on ths project, Cyntha A. Kroll, Ashok Deo Bardhan, Josh Krschenbaum, and Davd Howe, as well as Davd Lyons and other partcpants at the Publc Polcy Insttute of Calforna, for ther comments on an earler draft of ths paper.
Internatonal Trade and Calforna Employment: Some Statstcal Tests Abstract Ths paper presents prelmnary statstcal tests of the effects of rsng nternatonal trade on Calforna employment. We found a strong postve relatonshp between exports and manufacturng employment and a weak, but postve, effect of mports on manufacturng employment. Snce hgher mports are normally expected to reduce domestc producton, the latter result suggests that there exsts an addtonal lnk between mports and domestc demand. A partcular mechansm for ths addtonal lnk s that low-cost mports of a good, based on foregn producton, may lead to an expanson n domestc demand for the good. Although manufacturng employment n that ndustry wll probably stll fall as a result of the low-cost mports, employment n the assocated servce sector for that ndustry s lkely to rse. Indeed, the ncrease n servce sector employment may domnate, leadng to an overall ncrease n the ndustry s employment. The paper uses Calforna s computer ndustry to llustrate and quantfy ths mechansm.
1 Introducton Internatonal trade for the Unted States has been expandng rapdly n recent years, and t seems lkely that t wll contnue growng rapdly for the foreseeable future. Based on the avalable evdence, Calforna s nternatonal trade s expandng at an even faster pace. In ths paper, we present prelmnary statstcal tests of the effects of rsng nternatonal trade on Calforna employment. A prmary nnovaton s that we look at the effect of nternatonal trade on both manufacturng and servce sector employment. In the tradtonal analyss of the manufacturng sector, mports and exports, the two components of nternatonal trade, are presumed to have opposte effects on a regon s employment. Everythng else the same, rsng exports are expected to rase domestc employment. Ths occurs because, f domestc demand s fxed at a moment n tme, then rsng export demand creates rsng domestc producton and employment. 1 Comparably, everythng else the same, rsng mports are expected to decrease domestc employment. Ths occurs because, f domestc demand s fxed at a moment n tme, then rsng mports substtute for domestc producton, whch creates fallng domestc employment. In realty, the connectons between nternatonal trade and domestc employment are much more complex. Compared wth the smple descrpton, everythng else s unlkely to be the same. At a fundamental level, nternatonal trade may not have any long-run effect on the employment level, f wages, prces, and exchange rates are always adjustng to mantan full employment. Of course, there may stll be a short-run mpact of trade on employment because the economy s equlbrum adjustment takes tme. In the context of ths study, there 1 Ths assumes the economy s not operatng at full capacty or full employment. 1
are three further reasons why nternatonal trade may nfluence employment even f total US employment s fxed: 1) Internatonal trade may nfluence the dstrbuton of employment among the states. 2) Internatonal trade may nfluence the level of employment across sectors and ndustres. 3) Internatonal trade may nfluence the employment share of producton and nonproducton workers. As an example of ths thrd effect, nternatonal trade may swtch the proportons of total employment between the manufacturng and servce sectors of an economy. Specfcally, n ths paper, we consder the possblty that rsng nternatonal trade creates rsng servce sector employment, even as t creates fallng manufacturng sector employment. In fact, we fnd n the computer ndustry that nternatonal trade may actually be the source of rsng total employment, even though t creates fallng manufacturng sector employment! As another example, nternatonal trade may alter the proportons of domestc employment between low skll and hgh skll jobs. Specfcally, Bardhan and Howe (1998b) study the extent to whch mports tend to reduce low skll jobs, whle exports tend to expand hgh skll jobs. Ths, of course, s related to the swtch between servce sector and manufacturng sector employment created by nternatonal trade. The organzaton of ths paper s as follows: In Secton 2, we present regresson tests of the basc relatonshp between nternatonal trade and Calforna s manufacturng employment. These tests rely only on US nternatonal trade data, snce Calforna mport data do not yet exst, as descrbed n detal n Jaffee (1998). The results confrm a strong relatonshp between nternatonal trade and manufacturng sector employment, especally that rsng exports are assocated wth rsng employment. 2
In Secton 3, we expand the analyss to nclude the effect of nternatonal trade on servce sector employment. Snce the nternatonal trade data for servce ndustres s extremely lmted, (recall the dscusson n Jaffee (1998)), we cannot carry out a detaled statstcal analyss that would be comparable to the analyss n Secton 2 for the manufacturng sector. Instead, we focus on one mportant ndustry, the computer ndustry, to llustrate how nternatonal trade nteracts wth both manufacturng and servce sector employment. We fnd that the mpact of nternatonal trade on computer ndustry servce employment s decdedly postve, so much so that the mpact of nternatonal trade on total employment n the computer ndustry s lkely to be postve, even f the effect of trade on manufacturng employment n the computer ndustry s negatve. These results are reconfrmed by our detaled ntervew study of the computer ndustry, descrbed n Bardhan and Howe (1998a). Secton 4 provdes a summary of the paper s conclusons. 2 Estmates of Trade Effects on Calforna s Manufacturng Employment In ths secton, we develop and test a smple model of the relatonshp between nternatonal trade and manufacturng employment n Calforna. We evaluate the effects of nternatonal trade at three dfferent levels: 1. The nfluence of nternatonal trade on US producton for each ndustry. 2. The nfluence of nternatonal trade on Calforna producton for each ndustry. 3. The nfluence of nternatonal trade on Calforna employment for each ndustry. We begn wth the nfluence of nternatonal trade on US producton. 3
A Model of The Influence of Internatonal Trade on Producton At the US level, for each SIC code and at each tme t, a basc dentty lnks domestc demand D wth domestc producton P, exports X, and mports M : ( 1) D ( t) = P( t) + M ( t) X ( t) Ths states that US domestc demand for a good s satsfed by US producton, plus mports, mnus exports. 2 It s more useful to solve the equaton for producton: ( 2) P ( t) = D ( t) + X ( t) M ( t) The relatonshp can be transformed nto annual percent changes (where Y ndcates the percentage change operator on any varable Y): ( 3) P ( t) = d ( t) D ( t) + x ( t) X ( t) m ( t) M ( t) where ( ( 1) ( 1) ( 1) ) = D t t, ( ) =, ( ) = M t X d t. ( t 1) t ( t 1) t P x P m P ( t 1 ) Equaton (3) ndcates that the growth rate of producton s determned by the weghted growth rates of domestc demand, exports, and mports, where each weght represents the lagged share of that varable relatve to producton. In partcular, for a gven value of demand growth changes n the weghted growth rates of exports and mports create comparable changes n producton growth (postve for rsng exports and negatve for rsng mports). Rsng exports or mports, of course, may also create changes n domestc demand, n whch case the total effect of export and mport growth on producton growth may vary from that D, 2 A smlar relatonshp was used n Jaffee (1998), equaton (3). 4
shown n equaton (3). The magntude of these total trade effects can be evaluated by elmnatng the dentty by removng the ndustry demand varable from equaton (3). Specfcally, we replace ndustry demand varable D wth an aggregate measure (over all SIC codes) D. For each ndustry, all of the effects of nternatonal trade wll then be attrbuted to the export and mport varables. The estmated equaton s thus : ( 4) P( t) = α 0 + α1[ x ( t) X ( t)] + α 2[ m( t) M ( t)] + α3 D( t). The null hypothess s that the correlaton of both export and mport growth wth demand growth for ndustry s zero. In ths case, the expected coeffcent estmates for equaton (4) are α =, α = 1, α = 1, α 0. On the other hand, for example, f export 0 0 1 2 3 > growth were postvely correlated wth demand growth for ndustry, then we would expect α 1 > 1, and f mport growth were postvely correlated wth demand growth for ndustry, then we would expect α 2 > -1. Estmates of The Influence of Internatonal Trade on Producton Pooled tme-seres, cross-secton, estmates based on equaton (4) are shown n Table 1. All varables are measured as annual percent changes, consstent wth equaton (4). The data cover the years 1989 to 1995, so the estmaton perod s 1990 to 1995 annually takng nto account the lagged values of the varables. The equatons are estmated wth ordnary least squares. The a equatons n the upper half of the table are based on the cross-secton of 2- dgt SIC codes and the b equatons n the lower half of the table are based on the cross- 5
secton of 3-dgt SIC codes. We begn by lookng at the results based on the 2-dgt SIC code cross-secton. Results Based on the 2-Dgt SIC Code Cross-secton Equaton (1a) n Table 1 provdes estmates of the total effects of exports and mports on US producton growth across 2-dgt SIC codes. Export growth s the most sgnfcant factor, wth a coeffcent close to 1.0, whch s consstent wth the null hypothess that export growth and domestc demand growth are uncorrelated. Import growth, n turn, actually receves a postve, although small and nsgnfcant, coeffcent, qute dfferent from the expected coeffcent of 1.0 under the null hypothess. Ths results suggests that mports tend to have a postve correlaton wth the growth of demand across goods. Ths could arse, for example, f the market demand for goods rses n response to the expanson of low-cost mports. We wll dscuss ths mechansm n more detal n the followng secton. Fnally, the control varable for aggregate demand has a sgnfcant and postve coeffcent as expected. The R 2 s 0.40, whch s respectable for a percentage change specfcaton estmated usng pooled data. Overall, the equaton ndcates a sgnfcant and postve net effect of nternatonal trade on US producton growth. Equaton (2a) n Table 1 provdes comparable estmates of the trade determnants of Calforna s producton growth across 2-dgt SIC codes. The export and mport varables use the same US data as n equaton (1a), due to the lack of a full set of Calforna trade data. The aggregate producton growth varable s the total for Calforna s 2-dgt ndustres. The estmated coeffcents ndcate that exports are a sgnfcant determnant of Calforna s producton growth, and that mports have a postve effect that s actually larger and more sgnfcant than for the US. Ths could reflect the mportance of hgh technology products for 6
the Calforna economy, based on a mechansm descrbed n the next secton. The R 2 of equaton (2a) s 0.27, a value lower than for equaton (1), but stll respectable. Overall, the equaton ndcates a sgnfcant net postve effect of nternatonal trade on producton growth at the Calforna level. Equaton (3a) n Table 1 provdes comparable estmates of the trade determnants of Calforna employment growth across 2-dgt SIC codes. The rght-hand-sde varables are exactly the same as n equaton (2a). The trade effects on Calforna s employment growth and ts producton growth should be smlar, snce producton s the prmary determnant of employment. The estmates bear ths out. In fact, exports are an even more sgnfcant determnant of employment growth, whle mports reman a sgnfcantly postve factor. The R 2 s 0.21, slghtly lower than the value for Calforna s producton growth. Overall, the equaton ndcates a sgnfcant net postve effect of nternatonal trade on employment growth at the Calforna level. Results Based on the 3-Dgt SIC Code Cross-secton Estmates of the effects of nternatonal trade based on 3-dgt SIC code data are presented n the b equatons n the bottom half of Table 1 In each equaton, we fnd very low R 2 values, even just 0.04 for the Calforna employment equaton. Ths mples, not surprsngly, that factors other than nternatonal trade and aggregate demand are the most mportant determnants of the growth of employment n each specfc ndustry n Calforna. Nevertheless, the coeffcents for nternatonal trade and aggregate demand for the 3-dgt SIC code data are statstcally sgnfcant, even more so than for the estmates from the 2-dgt SIC code data. Furthermore, the coeffcent values for the 3-dgt regresson coeffcents are smlar 7
to those estmated from the 2-dgt data. Thus, these equatons confrms that there s a sgnfcant net postve effect of nternatonal trade on producton growth at both the US and Calforna levels, and on employment growth at the Calforna level. Some Qualfcatons There are 3 mportant qualfcatons to these results: 1. Imports and exports are based only on US data, because a full set of Calforna nternatonal trade data are not currently avalable. 2. The growth n aggregate producton s the only control varable used n evaluatng the effects of nternatonal trade across ndustres. Control varables for the dosyncratc aspects of specfc ndustres would also be useful, but data for approproprate varables, such as world-wde sales, are not avalable. 3. The regresson estmates are based on data that are dsaggregated only to the 3-dgt SIC code level. Unfortunately, t s beyond the scope of the present study to resolve these ssues. We know of no partcular bas, however, that these ssues create n our estmated equatons. Conclusons for the Regresson Analyss The regresson estmates of the response of Calforna s manufacturng employment growth to export growth are 0.78 for the 3-dgt SIC code data and 0.82 for the 2-dgt data. These estmates are close to the value of 1.0 that would be expected were export growth and US demand growth uncorrelated across SIC codes. Ths s reasonable, snce we would expect foregn demand to be the prmary determnant of US exports. The regresson estmates of the response of Calforna s manufacturng employment growth to mport growth are 0.07 for the 3-dgt SIC code data and 0.44 for the 2-dgt data. These estmates are much greater than the value of -1.0 that would be expected were export growth and US demand growth uncorrelated across SIC codes. Ths suggests that there s a postve 8
correlaton between mport growth and US demand growth. In the next secton, we look at a mechansm that could create such a correlaton. 3 Internatonal Trade and Calforna s Servce Sector In ths secton, we extend the results of the prevous secton to nclude employment n the servce sector of the economy. We cannot, however, carry out a statstcal analyss across all servce ndustres, comparable to our analyss of the manufacturng sector, because the nternatonal trade data for servce ndustres s extremely lmted even at the US level. Instead, we focus on one mportant ndustry, the computer ndustry Servce Employment n the Computer Industry Data for the computer sector are tabulated both as a manufacturng ndustry (manly SIC code 357) and as a servce ndustry (SIC code 737, computer programmng, data processng, and other computer related servces). A comparson of the computer manufacturng and computer servce ndustres n terms of employment, sales, and nternatonal trade s provded n Table 2. In terms of employment, the computer servce ndustry s more than 4 tmes the sze of the manufacturng ndustry at the US level and s almost 3 tmes the sze of the manufacturng ndustry at the Calforna level. In terms of sales, the computer servce ndustry s about 1.6 tmes the sze of the manufacturng ndustry at the US level (comparable data are not avalable for sales of the Calforna computer servces ndustry). These data thus ndcate the mportance, ndeed the greater mportance, of the computer servce ndustry. In terms of nternatonal trade, the reported 1995 numbers for the computer servces ndustry ndcate net exports (.e a trade surplus) of over $3 bllon n 1995, whle the 9
manufacturng ndustry had a trade defct of over $17 bllon. The $3 bllon of net exports for computer servces s the sum of the categores for computer and data processng servces and data base and other nformaton servces. The computer ndustry, moreover, s the source of two other sets of nternatonal transactons. Frst, the computer ndustry earns substantal ncome on ts foregn drect nvestments. Table 2 shows that n 1995 the US receved foregn drect nvestment ncome of over $3 bllon from computer manufacturng and over $1 bllon from computer servces. Second, the computer ndustry s the source of large amounts of net royaltes and lcense fees, although specfc quanttatve estmates are not avalable. The Drect Effects of Trade on Servce Employment n the Computer Industry Internatonal trade s lkely to have a strong postve effect on employment n the computer servce ndustry, snce the US s a net exporter of computer servces. However, the net exports of computer servces were only 2.2% of the total sales of the US computer servce ndustry n 1995. We can apply ths percentage to Calforna s computer servce ndustry employment, to obtan an estmate of the amount of Calforna employment n that ndustry that can be attrbuted to nternatonal trade. The result ndcates an ncrease of less than 4,000 jobs. Although alternatve estmaton methods mght gve dfferent results, the relatvely small amount of nternatonal trade n computer servces makes t unlkely that trade can be a drect and sgnfcant source of employment n the Calforna computer servce ndustry. Computer Industry Employment and Low Cost Foregn Producton 10
We now consder an alternatve, ndrect, mechansm through whch nternatonal trade may be the source of substantal numbers of new jobs n Calforna s computer servce ndustry. Ths mechansm s based on 3 relatonshps: 1. Low cost foregn producton s a key source of the fallng cost of computers. 2. The fallng cost of computers s a key bass for the ndustry s rapd growth. 3. The computer ndustry s rapd growth has created large amounts of servce employment for computer research and desgn and for software creaton. It s useful to provde a quanttatve benchmark for the amount of employment n Calforna s computer servce ndustry that could be attrbuted to nternatonal trade though the above mechansm. Two key parameter estmates are requred to calbrate the sze of ths trade effect: (1) the degree to whch foregn producton has reduced computer costs and (2) the growth n computer sales that can be attrbuted to the reduced computer costs. Snce detaled data are not avalable to calbrate these parameters, the estmates are necessarly back of the envelope n nature. Nevertheless, the exercse s nstructve. Table 3 shows 3 sets of estmates for the employment mpact of low-cost, foregn, producton n the computer servce ndustry. Column [1] shows the cost (.e. prce) reducton that s assumed to be created by low-cost foregn producton; the estmates range from a 25% to a 75% reducton n costs. Column [2] shows the alternatve assumptons for the prce elastcty of demand for computers. the elastctes range from 0.75 to -1.25. 3 The percentage change n computer ndustry sales that can be attrbuted to these factors s gven by: 3 These are actually very low estmates. Estmates from 2.9 to 7.2 are gven n Joanna Stavns (1997). 11
(5) S S C Q = [ ][ C P Q ], P where C/C = percentage change n costs (column 1 n Table 3) [ Q/Q][ P/P] = prce elastcty of demand (column 2 n Table 3) S/S = percentage change n sales attrbuted to low-cost, foregn, producton. Column [3] n Table 3 shows the share of total ndustry sales that can be attrbuted to the foregn producton factor, FS, whch s computed as: ( 6) S S FS = 1 + S S Column [4] n Table 3 shows the estmated number of jobs n the computer servce ndustry that can be attrbuted to low-cost, foregn producton, derved by multplyng FS n column (3) by total Calforna employment n the computer servce ndustry n 1994 (see Table 2). 4 The estmated number of jobs ganed n Calforna range from 26,000 to 79,000. In contrast, the total declne n computer manufacturng employment n Calforna between 1987 and 1995 was 28,000. Thus, even f a large part of ths loss of manufacturng jobs s attrbuted to the expanson of low-cost, foregn, computer manufacturng, the loss s strongly domnated by the gan n jobs n the computer servce ndustry that can be attrbuted to foregn computer producton. 4 Conclusons 4 The assumpton here s that low-cost foregn computer producton has ncreased jobs across the entre spectrum of the computer servce ndustry. Arguably, certan computer sectors, such as data processng could be excluded. Ths change would not have an mportant effect on our conclusons. 12
Ths paper has provded emprcal evdence concernng the mpact of nternatonal trade on Calforna employment. We presented results for all 2-dgt and 3-dgt manufacturng SIC codes and for the computer servce ndustry (SIC code 737). Wth regard to manufacturng employment, n Secton 2 we tested the extent to whch US exports and mports nfluence the growth n US producton, Calforna producton, and Calforna employment. We found a strong effect of exports on all three of these varables. Ths s consstent wth the hypothess that producton (and employment) growth bascally depends on the sum of export and domestc demand growth. We found a weak, but postve effect of mports on all three of the varables. Snce the drect effect of hgher mports should be lower domestc producton, ths suggests that mports tend to have an addtonal, ndrect, effect that rases domestc demand. In Secton 3, a partcular mechansm for ths ndrect effect, nvolvng servce sector employment, was developed. The key pont s that low-cost mports of a good, based on foregn producton, wll lead to an expanson n the total domestc demand for the good. Although manufacturng employment n that ndustry wll probably fall as a result of the lowcost mports, employment n the assocated servce sector for that ndustry s lkely to rse sgnfcantly. Indeed, t s qute possble that the ncrease n servce sector employment may domnate the declne n manufacturng employment, leadng to an overall ncrease n the ndustry s employment. The computer ndustry (SIC code 357) was used n Secton 3 as a prme example to carry out back of the envelope estmates of the possble sze of ths effect. Snce employment n the computer servces ndustry s from 3 to 4 tmes as large as employment n the computer manufacturng ndustry, ths s lkely to provde a favorable case to llustrate the 13
mechansm. The results reported n Table 3 showed that low-cost foregn producton created from 16% to 48% of the employment, whch s to say 26,000 to 79,000 jobs, n Calforna s computer servce sector (SIC code 737). In contrast, employment n Calforna s computer manufacturng sector declned by about 28,000 jobs between 1987 and 1995. The computer ndustry thus provdes a clear example n whch low-cost, foregn, producton of a good can lead to a net gan n the ndustry s employment, because the gan n servce sector employment sgnfcantly exceeds the loss n manufacturng sector employment. Ths relatonshp s dscussed further n Kroll and Krschenbaum (1998), whch reports the results of ntervew studes of the computer ndustry. 14
Table 1: Regresson Estmates of the Effects of Internatonal Trade Absolute value of t statstcs n parentheses below coeffcents Pooled cross-secton (SIC codes), tme seres (1990-1995), estmaton wth ordnary least squares Equaton # Dependent Varable R 2 α 0 α Weghted Export Growth: [ x ( t) X ( 1 t )] α Weghted Import Growth: [ m ( t) M ( 2 t )] Aggregate Producton Growth *: α D( ) 3 t Cross-Secton based on 2-Dgt SIC Codes 1a P US (t) Growth US Producton 2a P CA (t) Growth CA Producton 3a E CA (t) Growth CA Employment.40 -.02 (2.0).27 -.02 (2.0).21 -.05 (5.3).97 (6.9).65 (3.0).82 (4.3).11 (0.6).56 (2.1).44 (1.9) 1.09 (3.0) 1.76 (3.1).22 (0.4) Cross-Secton based on 3-Dgt SIC Codes 1b P US (t) Growth US Producton 2b P CA (t) Growth CA Producton 3b E CA (t) Growth CA Employment.18 -.01 (1.5).08.-.01 (1.6).04 -.04 (5.0).87 (10.5).95 (5.9).78 (4.9).03 (0.6).22 (2.8).07 (0.9).53 (6.2).62 (3.8).42 (2.5) * Aggregate producton growth s the sum total over all SIC codes and refers to US producton growth n equatons (1a and 1b) and Calforna producton growth n all other equatons. Data sources: Exports and mports are from Internatonal Trade Admnstraton data, see Jaffee (1998), Tables 8A to 9B. Calforna employment s from Annual Survey of Manufacturers data, see Jaffee (1998), Tables 1A and 1B. Calforna producton s from Annual Survey of Manufacturers sales data, see Jaffee (1998), Tables 6A and 6B. US producton growth s measured by sales from the same source. 15
Table 2: Computer Industry, Manufacturng and Servces 357 = Computer manufacturng; 737 = Computer servces EmploymSource Y1987 Y1988 Y1989 Y1990 Y1991 Y1992 Y1993 Y1994 Y1995 US 357 ASM 328 330 305 288 265 251 243 237 250 US 737 CES 629 673 736 772 797 836 893 959 1090 CA 357 ASM 93 93 90 84 73 78 69 61 65 CA 737 CBP 101 110 115 123 126 130 156 164 Sales, $ Mllon US 357 ASM 60627 67644 65426 64073 58755 66747 69249 78230 90249 US 737 ASS 56004 68305 78653 88299 94363 104651 116834 133143 152213 CA 357 ASM 16293 18958 18924 20309 18529 23271 23444 28516 30817 CA 737 Not Aval. Net Exports, $Mllon US 357 ITA 2178 3031 1343-2895 -8928-13243 -17205 US 737 SCB 683 1248 1106 1216 2013 2330 2588 3452 3484 Net Income, Drect Investment, $ Mllon US 357 SCB 3406 1562 2271 1855 3233 US 737 SCB 194 259 394 341 1175 Sources: ASM = Annual Survey of Manufacturers ASS = Annual Survey of Servces SCB = Survey of Current Busness, ssues of September and November 1996 ITA = Internatonal Trade Admnstraton, Bureau of the Census CBP = County Busness Pattens 16
Table 3: Employment Effects of Low-Cost, Foregn, Computer Producton Cost Change Due to Low-Cost Foregn Producton [1] Prce Elastcty of Computer Industry Demand [2] Share of Industry Sales Due to Foregn Producton [3]=[1][2]/(1+[1][2]) Computer Servce Employment Due to Foregn Producton [4] Case 1-0.25-0.75 0.16 25895 Case 2-0.50-1.00 0.33 54667 Case 3-0.75-1.25 0.48 79355 17
References Bardhan, Ashok Deo and Davd K. Howe (1998a), Globalzaton and Labor: The Effect of Imported Inputs on Blue Collar Workers, Workng Paper 98-261, Fsher Center for Real Estate and Urban Economcs, Unversty of Calforna, Berkeley, 1998. Bardhan, Ashok Deo and Davd K. Howe (1998b) Transnatonal Socal Networks, Transportaton Costs and the Geographc Dstrbuton of Calforna s Exports, Workng Paper 98-262, Fsher Center for Real Estate and Urban Economcs, Unversty of Calforna, Berkeley, 1998. Jaffee, Dwght M. (1998), Internatonal Trade and Calforna s Economy: Summary of the Data, Workng Paper 98-259, Fsher Center for Real Estate and Urban Economcs, Unversty of Calforna, Berkeley, 1998. Kroll, Cyntha A. and Josh Krschenbaum (1998), The Integraton of Trade nto Calforna Industry: Case Studes of the Computer Cluster and the Food Processng Industry, Workng Paper 98-260, Fsher Center for Real Estate and Urban Economcs, Unversty of Calforna, Berkeley, 1998. Stavns, Joanna (1997), "Estmatng Demand Elastctes n a Dfferentated Product Industry: The Personal Computer Market," Journal of Economcs and Busness 1997:347-367. 18