Measuring trade exposure

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    IMPLAN Support
    Hi Thank you for your post. It depends what you mean by trade exposure. Sometimes trade exposure is meant to be related to exposure to changes in the exchange rate; in such a case, domestic trade would not be relevant. In general, though, the sum of domestic and foreign exports as a share of an industry’s output would show how important external markets are to that industry’s production. Trade “exposure”, again, depending on what you’re trying to evaluate, might also involve imports. You can perform analogous calculations with imports. You should be aware that IMPLAN estimates foreign trade based on national rates of trade by industry. For example, if the United States as a whole exports 10% of wheat it produces, all states and counties are assumed to export 10% of their wheat production. We are currently exploring ways to differentiate foreign trade rates by county, but have not yet implemented any new methods. Domestic trade rates are estimated by IMPLAN’s gravity model. See here for more information: https://implan.com/index.php?view=document&alias=16-gravity-model-white-paper&category_slug=internal-docs&layout=default&option=com_docman&Itemid=1764

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