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The Relationship of Wages and Exports for the Textile Industry: The Case from the United States

Year 2025, Issue: 86, 31 - 43, 25.10.2025

Abstract

As the 1980s progressed, emerging nations made efforts to embrace growth models that were centered on exports, progressively moving away from the economic model that relied on import substitution. The rising prominence of global trade has stimulated researchers' interest in manufacturing processes, the transfer of manufactured goods to other countries, and the ramifications for employment. The aim of this study is to investigate the influence that bilateral trade, a significant consequence of global liberalization, has on national wages. The data analyzed in this study is sourced from the textile product mills sector in the United States of America (USA) and covers the years 1987 to 2023. Within the scope of this investigation, the Johansen Cointegration Test (1992) was utilized to investigate the model that originates from the Cobb-Douglas manufacturing function. The study concluded that exports affect the labor force over time, and this effect is expected to grow. An investigation is conducted, and the results of that investigation are used to formulate a policy recommendation.

References

  • Aslan, N. and Terzi, N. (2006). Heckscher-Ohlin-Samuelson (HOS) teorisi ve teorinin değerlendirilmesi. Marmara Üniversitesi İktisadi ve İdari Bilimler Dergisi, 21(1), 1-14.
  • Avalos, A., and Savvides, A. (2003). On the determinants of the wage differential in Latin America and east Asia: openness. technology transfer and labor supply. LABEA Working Paper, (19).
  • Bae, J., and Kuruvilla, S. (2025). Corporate social responsibility and wages in the global apparel supply Chain. Corporate Social Responsibility and Environmental Management, 32(4), 4655-4670.
  • Bernard, A. B. and Jensen, J. B. (1995). Exporters, jobs, and wages in U.S. manufacturing: 1976- 1987. Brookings Papers on Economic Activity. Microeconomics, 1995, 67–119. doi: 10.2307/2534772
  • Beyer, H., Rojas, P., and Vergara, R. (1999). Trade liberalization and wage inequality. Journal of Development Economics, 59(1), 103-123. doi: 10.2307/2534772
  • Borjas, G. J., Richard B. F. and Lawrence F. K. (1991). On the labor market effects of immigration and trade. Working Paper 3761. Cambridge, Mass.: National Bureau of Economic Research (June). doi: 10.3386/w3761
  • Brambilla, I., and Porto, G. G. (2016). High-income export destinations, quality and wages. Journal of International Economics, 98, 21-35. doi: 10,1016/j.jintrco.2015.09.004
  • Brambilla, I., Depetris Chauvin, N., and Porto, G. (2017). Examining the export wage premium in developing countries. Review of International Economics, 25(3), 447-475. doi:10.1111/roie.12231
  • Breau, S., and Rigby, D. L. (2006). Is there really an export wage premium? a case study of Los Angeles using matched employee-employer data. International Regional Science Review, 29(3), 297-310. doi: 10.1177/0160017606289899
  • Cai, X., Zhang, R. and Wang, Y. (2022). Effect of changes in China’s Manufacturing Wages OLS algorithm based on the amount of import and export. In 2022 International Conference on Artificial Intelligence, Internet and Digital Economy (ICAID 2022) (pp. 638-646). Atlantis Press.
  • Cheung, K. Y., and Fan, C. S. (2002). Does trade lead to wage inequality? a cross-industry analysis. Journal of the Asia Pacific Economy, 7(2), 147-159. doi:10.1080/13547860220134798
  • De Santis, R. A. (2001). The 1990 trade liberalisation policy of Turkey: An applied general equilibrium assessment. International Economic Journal, 15(2), 115-132.
  • Diewert, W. E. (1986). Export supply and import demand functions: a production theory approach. NBER. doi: 10.3386/w2011
  • Esquivel, G. and Rodriguez-López, J. A. (2003). Technology, trade, and wage inequality in Mexico before and after NAFTA. Journal of Development Economics, 72(2), 543-565.
  • Euwals, R., van Heuvelen, G. H., Meijerink, G., Möhlmann, J. and Rabaté, S. (2022). The impact of import competition and export opportunities on the Dutch labour market. De Economist, 170(3), 343-374.
  • Ghosh, K., Saunders, P. J., and Biswas, B. (2002). An empirical investigation of the relations among wage differentials, productivity growth, and trade. Contemporary Economic Policy, 20(1), 83-92. doi: 10.1093/cep/20.1.83
  • Greenaway, D., Hine, R. C., and Wright, P. (1999). An empirical assessment of the impact of trade on employment in the United Kingdom. European Journal of Political Economy, 15(3), 485-500. doi: 10.1016/s0176-2680(99)00023-3
  • Haouas, I., Yagoubi, M., and Heshmati, A. (2005). The impacts of trade liberalization on employment and wages in Tunisian industries. Journal of International Development: The Journal of the Development Studies Association, 17(4), 527-551. doi: 10.1002/jid.1173
  • Johansen, S. (1988). Statistical analysis of cointegration vectors. Journal of Economic Dynamics and Control, 12(2-3), 231-254. doi: 10.1016/0165-1889(88)90041-3
  • Johansen, S. (1991). Estimation and hypothesis testing of cointegration vectors in gaussian vector autoregressive models. Econometrica: Journal of the Econometric Society, 1551- 1580. doi: 10.2307/2938278
  • Johansen, S. (1992). Sointegration in partial systems and the efficiency of single-equation analysis. Journal of Econometrics, 52(3), 389-402. doi: 10.1016/0304-4076(92)90019-n
  • Johansen, S. R. (1994). The role of the constant and linear terms in cointegration analysis of nonstationary variables. Econometric Reviews, 13(2), 205-229. doi:10.1080/07474939408800284
  • Kilduff, P.D.F. and Priestland, C. (2001). Strategic transformation in the us textile and apparel industries, a study of business dynamics with forecasts up to 2010. College of Textiles, North Carolina State University, Raleigh, NC.
  • Kim, H., and Thompson, H. (2009). Factor proportions wages in a structural vector autoregression. MPRA Paper No.17798, 1-20.
  • Kravis, I. B. (1956). Wages and foreign trade. The Review of Economics and Statistics, 38(1), 14–30. doi: 10.2307/1925555
  • Krugman, P. and Robert L. (1993). Trade, jobs, and wages. NBER Working Papers, 4478. doi: 10.3386/w4478
  • Liang, Y. (2021). Job creation and job destruction: The effect of trade shocks on US manufacturing employment. The World Economy, 44(10), 2909-2949.
  • Luna, L. A., and Winkler, D. (2024). Linking Export Activities to Productivity and Wage Rate Growth. Policy Research Working Paper 10737, World Bank.
  • Milner, C., and Wright, P. (1998). Modelling labour market adjustment to trade liberalization in an industrializing economy. The Economic Journal, 108(447), 509-528. doi:10.1111/1468-0297.00301
  • Milner, C., and Tandrayen, V. (2007). The impact of exporting and export destination on manufacturing wages: evidence for Sub‐Saharan Africa. Review of Development Economics, 11(1), 13-30. doi: 10.1111/j.1467-9361.2006.00353.x
  • Munch, J. R., and Skaksen, J. R. (2008). Human capital and wages in exporting firms. Journal of International Economics, 75(2), 363-372. doi: 10.1016/j.jinteco.2008.02.006
  • Paus, E. A., and Robinson, M. D. (1997). The implications of increasing economic openness for real wages in developing countries, 1973–1990. World Development, 25(4), 537-547.
  • Revenga, A. L. (1992). Exporting jobs? the impact of import competition on employment and wages in U.S. manufacturing. Quarterly Journal of Economics, 107(1), 255-84. doi: 10.2307/2118329
  • Romer, D. (2006). Advanced macroeconomics (Third Ed.). New York: McGraw-Hill.
  • Sachs, J. D. and Shatz, H. J. (1994). Trade and jobs in US manufacturing. Brookings Papers on Economic Activity, 1, 1-84. doi: 10.2307/2534630
  • Sakurai, K. (2004). How does trade affect the labor market? evidence from Japanese manufacturing. Japan and the World Economy, 16(2), 139-161. doi: 10.1016/s0922-1425(03)00023-9
  • Schank, T., Schnabel, C., and Wagner, J. (2007). Do exporters really pay higher wages? first evidence from German linked employer–employee data. Journal of International Economics, 72(1), 52-74. doi: 10.1016/j.jinteco.2006.08.004
  • Singletary, E.P. and Winchester, S.C. Jr (1996). Beyond mass production: analysis of the emerging manufacturing transformation in the US Textile Industry. Journal of the Textile Institute, 87(2), 97‐116. doi: 10.1080/00405009608659107
  • Toyne, B., Arpan, J.S., Barnett, A.H., Ricks, D.A. and Shimp, T.A. (1983). The US textile mill products industry: strategies for the 1980s and beyond. University of South Carolina Press, Columbia, SC.
  • Wang, X. (2013). The determinants of textile and apparel export performance in Asian countries. Unpublished master’s thesis. Iowa State University.
  • Were, M., and Kayizzi‐Mugerwa, S. (2009). Do exporting firms pay higher wages? evidence from Kenya’s manufacturing sector. African Development Review, 21(3), 435-453. doi: 10.1111/j.1467-8268.2009.00217.x
  • Yasuda, H. (1994). An analysis of the responses of the United States textile and apparel industries to changes in the business environment between 1960 and 1992. Unpublished doctoral dissertation. University of Leeds.

Tekstil Endüstrisinde Ücretler ve İhracat İlişkisi: Amerika Birleşik Devletleri Örneği

Year 2025, Issue: 86, 31 - 43, 25.10.2025

Abstract

1980 ve sonrasında, ekonomik olarak gelişme göstermeye başlayan ülkelerin ithal ürün ikamesine dayanan ekonomik büyüme modelinden uzaklaştıkları ve ihracat odaklı büyüme modellerini benimsemeye başladıkları görülmektedir. Bu süreçte konuyla ilgilenen araştırmacıların küresel ticaretin artmasıyla birlikte, ülkelerin üretim süreçlerine, üretilen malların ihracatına ve ihracatın istihdam üzerindeki etkilerine daha fazla odaklandıkları anlaşılmaktadır. Bu ilginin artışına paralel olarak, küresel liberalleşmenin önemli bir sonucu olan ikili ticaretin ulusal ücretler üzerindeki etkisi de araştırmacıların ilgisini daha fazla çekmektedir. Buradan hareketle bu çalışma, Amerika Birleşik Devletleri (ABD) için önemli bir iş gücü kaynağı olan tekstil sektörünü, tekstil endüstrisindeki ihracatın yine aynı sektördeki ücretler üzerindeki etkisi araştırmaktadır. Çalışmada kullanılan veriler, ABD tekstil endüstrisine ait ve 1987'den 2023'e kadar olan yıllık verilerdir. Bu araştırma kapsamında, Cobb-Douglas üretim fonksiyonundan kullanılarak üretilen model, Johansen Eşbütünleşme Testi (1992) kullanılarak analiz edilmiştir. Elde edilen analizin sonucunda, ihracatın bir süre boyunca işgücü üzerinde bir etkisi olduğu sonucuna varılmış ve bu etkinin ilerleyen yıllar itibariyle daha da belirginleşmeye devam edeceği düşünülmektedir. Bunun yanında, araştırmanın sonuçları bir politika önerisi oluşturmak içinde kullanılmıştır.

References

  • Aslan, N. and Terzi, N. (2006). Heckscher-Ohlin-Samuelson (HOS) teorisi ve teorinin değerlendirilmesi. Marmara Üniversitesi İktisadi ve İdari Bilimler Dergisi, 21(1), 1-14.
  • Avalos, A., and Savvides, A. (2003). On the determinants of the wage differential in Latin America and east Asia: openness. technology transfer and labor supply. LABEA Working Paper, (19).
  • Bae, J., and Kuruvilla, S. (2025). Corporate social responsibility and wages in the global apparel supply Chain. Corporate Social Responsibility and Environmental Management, 32(4), 4655-4670.
  • Bernard, A. B. and Jensen, J. B. (1995). Exporters, jobs, and wages in U.S. manufacturing: 1976- 1987. Brookings Papers on Economic Activity. Microeconomics, 1995, 67–119. doi: 10.2307/2534772
  • Beyer, H., Rojas, P., and Vergara, R. (1999). Trade liberalization and wage inequality. Journal of Development Economics, 59(1), 103-123. doi: 10.2307/2534772
  • Borjas, G. J., Richard B. F. and Lawrence F. K. (1991). On the labor market effects of immigration and trade. Working Paper 3761. Cambridge, Mass.: National Bureau of Economic Research (June). doi: 10.3386/w3761
  • Brambilla, I., and Porto, G. G. (2016). High-income export destinations, quality and wages. Journal of International Economics, 98, 21-35. doi: 10,1016/j.jintrco.2015.09.004
  • Brambilla, I., Depetris Chauvin, N., and Porto, G. (2017). Examining the export wage premium in developing countries. Review of International Economics, 25(3), 447-475. doi:10.1111/roie.12231
  • Breau, S., and Rigby, D. L. (2006). Is there really an export wage premium? a case study of Los Angeles using matched employee-employer data. International Regional Science Review, 29(3), 297-310. doi: 10.1177/0160017606289899
  • Cai, X., Zhang, R. and Wang, Y. (2022). Effect of changes in China’s Manufacturing Wages OLS algorithm based on the amount of import and export. In 2022 International Conference on Artificial Intelligence, Internet and Digital Economy (ICAID 2022) (pp. 638-646). Atlantis Press.
  • Cheung, K. Y., and Fan, C. S. (2002). Does trade lead to wage inequality? a cross-industry analysis. Journal of the Asia Pacific Economy, 7(2), 147-159. doi:10.1080/13547860220134798
  • De Santis, R. A. (2001). The 1990 trade liberalisation policy of Turkey: An applied general equilibrium assessment. International Economic Journal, 15(2), 115-132.
  • Diewert, W. E. (1986). Export supply and import demand functions: a production theory approach. NBER. doi: 10.3386/w2011
  • Esquivel, G. and Rodriguez-López, J. A. (2003). Technology, trade, and wage inequality in Mexico before and after NAFTA. Journal of Development Economics, 72(2), 543-565.
  • Euwals, R., van Heuvelen, G. H., Meijerink, G., Möhlmann, J. and Rabaté, S. (2022). The impact of import competition and export opportunities on the Dutch labour market. De Economist, 170(3), 343-374.
  • Ghosh, K., Saunders, P. J., and Biswas, B. (2002). An empirical investigation of the relations among wage differentials, productivity growth, and trade. Contemporary Economic Policy, 20(1), 83-92. doi: 10.1093/cep/20.1.83
  • Greenaway, D., Hine, R. C., and Wright, P. (1999). An empirical assessment of the impact of trade on employment in the United Kingdom. European Journal of Political Economy, 15(3), 485-500. doi: 10.1016/s0176-2680(99)00023-3
  • Haouas, I., Yagoubi, M., and Heshmati, A. (2005). The impacts of trade liberalization on employment and wages in Tunisian industries. Journal of International Development: The Journal of the Development Studies Association, 17(4), 527-551. doi: 10.1002/jid.1173
  • Johansen, S. (1988). Statistical analysis of cointegration vectors. Journal of Economic Dynamics and Control, 12(2-3), 231-254. doi: 10.1016/0165-1889(88)90041-3
  • Johansen, S. (1991). Estimation and hypothesis testing of cointegration vectors in gaussian vector autoregressive models. Econometrica: Journal of the Econometric Society, 1551- 1580. doi: 10.2307/2938278
  • Johansen, S. (1992). Sointegration in partial systems and the efficiency of single-equation analysis. Journal of Econometrics, 52(3), 389-402. doi: 10.1016/0304-4076(92)90019-n
  • Johansen, S. R. (1994). The role of the constant and linear terms in cointegration analysis of nonstationary variables. Econometric Reviews, 13(2), 205-229. doi:10.1080/07474939408800284
  • Kilduff, P.D.F. and Priestland, C. (2001). Strategic transformation in the us textile and apparel industries, a study of business dynamics with forecasts up to 2010. College of Textiles, North Carolina State University, Raleigh, NC.
  • Kim, H., and Thompson, H. (2009). Factor proportions wages in a structural vector autoregression. MPRA Paper No.17798, 1-20.
  • Kravis, I. B. (1956). Wages and foreign trade. The Review of Economics and Statistics, 38(1), 14–30. doi: 10.2307/1925555
  • Krugman, P. and Robert L. (1993). Trade, jobs, and wages. NBER Working Papers, 4478. doi: 10.3386/w4478
  • Liang, Y. (2021). Job creation and job destruction: The effect of trade shocks on US manufacturing employment. The World Economy, 44(10), 2909-2949.
  • Luna, L. A., and Winkler, D. (2024). Linking Export Activities to Productivity and Wage Rate Growth. Policy Research Working Paper 10737, World Bank.
  • Milner, C., and Wright, P. (1998). Modelling labour market adjustment to trade liberalization in an industrializing economy. The Economic Journal, 108(447), 509-528. doi:10.1111/1468-0297.00301
  • Milner, C., and Tandrayen, V. (2007). The impact of exporting and export destination on manufacturing wages: evidence for Sub‐Saharan Africa. Review of Development Economics, 11(1), 13-30. doi: 10.1111/j.1467-9361.2006.00353.x
  • Munch, J. R., and Skaksen, J. R. (2008). Human capital and wages in exporting firms. Journal of International Economics, 75(2), 363-372. doi: 10.1016/j.jinteco.2008.02.006
  • Paus, E. A., and Robinson, M. D. (1997). The implications of increasing economic openness for real wages in developing countries, 1973–1990. World Development, 25(4), 537-547.
  • Revenga, A. L. (1992). Exporting jobs? the impact of import competition on employment and wages in U.S. manufacturing. Quarterly Journal of Economics, 107(1), 255-84. doi: 10.2307/2118329
  • Romer, D. (2006). Advanced macroeconomics (Third Ed.). New York: McGraw-Hill.
  • Sachs, J. D. and Shatz, H. J. (1994). Trade and jobs in US manufacturing. Brookings Papers on Economic Activity, 1, 1-84. doi: 10.2307/2534630
  • Sakurai, K. (2004). How does trade affect the labor market? evidence from Japanese manufacturing. Japan and the World Economy, 16(2), 139-161. doi: 10.1016/s0922-1425(03)00023-9
  • Schank, T., Schnabel, C., and Wagner, J. (2007). Do exporters really pay higher wages? first evidence from German linked employer–employee data. Journal of International Economics, 72(1), 52-74. doi: 10.1016/j.jinteco.2006.08.004
  • Singletary, E.P. and Winchester, S.C. Jr (1996). Beyond mass production: analysis of the emerging manufacturing transformation in the US Textile Industry. Journal of the Textile Institute, 87(2), 97‐116. doi: 10.1080/00405009608659107
  • Toyne, B., Arpan, J.S., Barnett, A.H., Ricks, D.A. and Shimp, T.A. (1983). The US textile mill products industry: strategies for the 1980s and beyond. University of South Carolina Press, Columbia, SC.
  • Wang, X. (2013). The determinants of textile and apparel export performance in Asian countries. Unpublished master’s thesis. Iowa State University.
  • Were, M., and Kayizzi‐Mugerwa, S. (2009). Do exporting firms pay higher wages? evidence from Kenya’s manufacturing sector. African Development Review, 21(3), 435-453. doi: 10.1111/j.1467-8268.2009.00217.x
  • Yasuda, H. (1994). An analysis of the responses of the United States textile and apparel industries to changes in the business environment between 1960 and 1992. Unpublished doctoral dissertation. University of Leeds.
There are 42 citations in total.

Details

Primary Language English
Subjects International Economics (Other)
Journal Section RESEARCH ARTICLES
Authors

İbrahim Özaytürk 0000-0001-5292-6313

Publication Date October 25, 2025
Submission Date May 1, 2025
Acceptance Date October 25, 2025
Published in Issue Year 2025 Issue: 86

Cite

APA Özaytürk, İ. (2025). The Relationship of Wages and Exports for the Textile Industry: The Case from the United States. Dumlupınar Üniversitesi Sosyal Bilimler Dergisi(86), 31-43.
AMA Özaytürk İ. The Relationship of Wages and Exports for the Textile Industry: The Case from the United States. Dumlupınar Üniversitesi Sosyal Bilimler Dergisi. October 2025;(86):31-43.
Chicago Özaytürk, İbrahim. “The Relationship of Wages and Exports for the Textile Industry: The Case from the United States”. Dumlupınar Üniversitesi Sosyal Bilimler Dergisi, no. 86 (October 2025): 31-43.
EndNote Özaytürk İ (October 1, 2025) The Relationship of Wages and Exports for the Textile Industry: The Case from the United States. Dumlupınar Üniversitesi Sosyal Bilimler Dergisi 86 31–43.
IEEE İ. Özaytürk, “The Relationship of Wages and Exports for the Textile Industry: The Case from the United States”, Dumlupınar Üniversitesi Sosyal Bilimler Dergisi, no. 86, pp. 31–43, October2025.
ISNAD Özaytürk, İbrahim. “The Relationship of Wages and Exports for the Textile Industry: The Case from the United States”. Dumlupınar Üniversitesi Sosyal Bilimler Dergisi 86 (October2025), 31-43.
JAMA Özaytürk İ. The Relationship of Wages and Exports for the Textile Industry: The Case from the United States. Dumlupınar Üniversitesi Sosyal Bilimler Dergisi. 2025;:31–43.
MLA Özaytürk, İbrahim. “The Relationship of Wages and Exports for the Textile Industry: The Case from the United States”. Dumlupınar Üniversitesi Sosyal Bilimler Dergisi, no. 86, 2025, pp. 31-43.
Vancouver Özaytürk İ. The Relationship of Wages and Exports for the Textile Industry: The Case from the United States. Dumlupınar Üniversitesi Sosyal Bilimler Dergisi. 2025(86):31-43.