Import demand response of MFA apparel/nonapparel fibers and cottons in the United States: a case study of China and Hong Kong

Abstract

This paper documents the export performance of multifiber agreement fibers mainly of cottons exported from Mainland China and Hong Kong to the United States during 1989–2005. The authors used the cointegration and error correction approach to investigate whether long-running relationships among variables exist. The empirical results suggest that a unique long-run relationship exists among import price and quantity, real income per capita, and trade liberalization. The short-run dynamics of export demand functions were estimated using an error correction model in which the error correction term was found correctly signed. The empirical results provide insights into private and government agencies that are actively engaged in the business.

Keywords:

• US-HK
• MFA
• apparel and nonapparel fibers and cottons
• import demand function
• elasticity
• cointegration

Notes

^a The best fitted dummy variable was included.

^a A, B, C, and D represent apparel fibers, nonapparel fibers, apparel cottons, and nonapparel fibers, respectively.

1. Original data are available at http://otexa.ita.doc.gov/msrpoint.htm