What share of US manufacturing firms export? That’s a simple question. But my answer recently changed by quite a lot. While updating one of my class slides that is titled “very few firms export”, I noticed a pretty stark contrast between the old and new statistics I was displaying. In the table below, the 2002 numbers are from Table 2 of Bernard, Jensen, Redding, and Schott (JEP 2007), which reports that 18% of US manufacturing firms were exporters in 2002. The 2007 numbers are from Table 1 of Bernard, Jensen, Redding, and Schott (JEL 2018), which reports that 35% of US manufacturing firms were exporters in 2007.
| NAICS | Description | Share of firms | Exporting firm share | Export sales share of exporters | |||
|---|---|---|---|---|---|---|---|
| 2002 | 2007 | 2002 | 2007 | 2002 | 2007 | ||
| 311 | Food Manufacturing | 6.8 | 6.8 | 12 | 23 | 15 | 21 |
| 312 | Beverage and Tobacco Product | 0.7 | 0.9 | 23 | 30 | 7 | 30 |
| 313 | Textile Mills | 1.0 | 0.8 | 25 | 57 | 13 | 39 |
| 314 | Textile Product Mills | 1.9 | 2.7 | 12 | 19 | 12 | 12 |
| 315 | Apparel Manufacturing | 3.2 | 3.6 | 8 | 22 | 14 | 16 |
| 316 | Leather and Allied Product | 0.4 | 0.3 | 24 | 56 | 13 | 19 |
| 321 | Wood Product Manufacturing | 5.5 | 4.8 | 8 | 21 | 19 | 09 |
| 322 | Paper Manufacturing | 1.4 | 1.5 | 24 | 48 | 9 | 06 |
| 323 | Printing and Related Support | 11.9 | 11.1 | 5 | 15 | 14 | 10 |
| 324 | Petroleum and Coal Products | 0.4 | 0.5 | 18 | 34 | 12 | 13 |
| 325 | Chemical Manufacturing | 3.1 | 3.3 | 36 | 65 | 14 | 23 |
| 326 | Plastics and Rubber Products | 4.4 | 3.9 | 28 | 59 | 10 | 11 |
| 327 | Nonmetallic Mineral Product | 4.0 | 4.3 | 9 | 19 | 12 | 09 |
| 331 | Primary Metal Manufacturing | 1.5 | 1.5 | 30 | 58 | 10 | 31 |
| 332 | Fabricated Metal Product | 19.9 | 20.6 | 14 | 30 | 12 | 09 |
| 333 | Machinery Manufacturing | 9.0 | 8.7 | 33 | 61 | 16 | 15 |
| 334 | Computer and Electronic Product | 4.5 | 3.9 | 38 | 75 | 21 | 28 |
| 335 | Electrical Equipment, Appliance | 1.7 | 1.7 | 38 | 70 | 13 | 47 |
| 336 | Transportation Equipment | 3.4 | 3.4 | 28 | 57 | 13 | 16 |
| 337 | Furniture and Related Product | 6.4 | 6.5 | 7 | 16 | 10 | 14 |
| 339 | Miscellaneous Manufacturing | 9.1 | 9.3 | 2 | 32 | 15 | 16 |
| Aggregate manufacturing | 100 | 100 | 18 | 35 | 14 | 17 | |
Did a huge shift occur between 2002 and 2007? No. The difference between these two tables is due to a change in the data source used to identify whether a firm exports. In their 2007 JEP article, BJRS used a question about export sales in the Census of Manufactures (CM). In their 2018 JEL article, BJRS used customs records from the Longitudinal Firm Trade Transactions database (LFTTD) that they built. Footnote 23 of the latter article notes that “the customs records from LFTTD imply that exporting is more prevalent than would be concluded based on the export question in the Census of Manufactures.”
This is a bit of an understatement: only about half of firms that export in customs records say that they export when asked about it in the Census of Manufactures! [This comparison is inexact because the share of exporting firms may have really increased from 2002 to 2007, but BJRS (2018) say that they “find a relatively similar pattern of results for 2007 as for 2002” when they use the CM question for both years.] The typical three-digit NAICS industry has the share of firms that export roughly double when using customs data rather than the Census of Manufactures survey response. Who knows what happened in “Miscellaneous Manufacturing” (NAICS 339), which had 2% in the 2002 CM and 35% in the 2007 LFTTD.
I presume that the customs records are more reliable than the CM question. More firms are exporters than I previously thought!
Trade Diversion 