U.S. Imports by Origin: A Characteristics Approach.

This paper proposes a rigorous framework for the incorporation of characteristics in estimating U.S. import demand functions by region of origin Assuming a CES aggregator function, we derive an import share equation that is identical for all regions of origin. Differences in shares are explained by differences in prices and in the characteristics of the exporting regions The model is estimated with data for seven of the major exporters to the United States, Canada, Japan, West Germany, the United Kingdom, France, Italy, and, in some cases, Mexico The results indicate that the U.S. import share of a foreign region is positively related to that region's economic size, labor intensity, labor efficiency and proximity to the United States. [ABSTRACT FROM AUTHOR]