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BPEA Article

U.S. Comparative Advantage: Some Further Results


IN THE LAST ISSUE OF this journal, Helen Junz and I reported the preliminary results of an analysis of the sources of U.S. comparative advantage in trade in manufactured goods. The basic answer was that the U.S. advantage is in commodities whose production uses human capital intensively. We looked only at data for the mid-1960s, which were developed separately by Keesing and Hufbauer. To study the data, we performed multiple regressions relating net exports by standard international trade classification (SITC) commodity groups to six production characteristics: human capital per man (H), physical capital per man (K), a measure of the presence of economies of scale in production (S), the date at which the commodity first appeared in the U.S. export schedule (P), the ratio of expenditures on research and development to value added (RD), and the fraction of employees in the professional, scientific, and technical categories (T).

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