STATE ECONOMIC-GROWTH AND INTERNATIONAL EXPORT ORIENTATION

This paper examines the relationship between the degree of state inter national export orientation and US state industrial growth rates. Both export orientation variables as well as domestic factors were used to analyse the extent of their effect on state industrial growth from 19 77 to 1987. The results indicate that state export promotion expenditu res were not significant in influencing domestic employment growth, wh ile the variable was negatively correlated with export employment grow th. However, a high proportion of exports to total shipments in the in itial year, was significant in explaining state industrial growth rate s. An important result was that states exporting to growing regions ex perienced higher growth rates, indicating that world demand influences state economic growth. Furthermore, the domestic market potential had a strong positive influence on all measures of growth including the e xport sector, providing support for the notion that US economic growth is largely driven by the domestic market. A surprising result was tha t relative capital endowment was not significantly correlated with gro wth in the export sector, while it was negatively correlated with dome stic and total employment growth rates.