Shift-share analysis and international trade

摘要

In today's global economy, increased international market integration and a steep rise in the number of multinational enterprises have made the notion of there being no international trade bizarre indeed. This paper revises the shift-share analysis by adopting the net export ratio (NX) to separate the domestic and foreign components of regional employment change and to show the revealed comparative advantage of international trade. The result is found that the effects of international trade on employment change are ubiquitous, and its importance therefore cannot be overlooked. As for the significantly positive values of NX and its relative growth, for example, the employment change mainly arises from the international market and not from domestic demand. This modification makes the shift-share analysis more reasonable and sensible, especially in relation to a small open economy.