Market Power and Unites States Sectoral Textile Imports

Abstract

This paper estimates US textiles import elasticities with 20 of its largest textiles exporters by utilizing cointegration methodology. The soon-to-be-implemented abolition of quotas on textiles makes the study of these import elasticities especially relevant to many developing countries particularly to those that have a significant textiles component in their exports. The study uses disaggregated data (4 digit ISIC) to separately consider seven textiles sub-sectors and calculates income and price elasticities for each one. While China appears to be in a position of significant market power in a majority of the textiles sub-sectors examined in this paper, the estimates also identify the particular sub-sectors in which the smaller textile exporters are in a position of some strength. Specifically, the carpets and rugs, and the apparels sectors are identified as those where smaller exporters have relatively more market power.