Global Linkages of Subnational Regions: Coastal Exports and International Networks

1. INTRODUCTION Trade issues have traditionally been analyzed at the level of the nation-state. Indeed, in international trade literature a country functions largely as a monolithic black box. For a large country, such as the United States, this aggregate level of analysis may obscure some underlying regional economic features and attributes. The latter have acquired increasing significance because growing global economic integration has given an added impetus to forces of agglomeration and specialization within nations. The study of international trade of subnational regions offers the possibility of gaining insight into the building blocks of macro-trading affinities. For example, export data, available for constituent states of the United States, allows one to study variations in trading patterns among different states and regions of the union. The trading affinities of regional economies would also be helpful in assessing their vulnerability to foreign shocks and in determining changes in competitiveness relative to the national and other subnational economies. The objective here is to study the differences between and the determinants of exports from the two coastal economic regions of the United States: the West Coast economic region, comprising the contiguous coastal states of California, Oregon, and Washington, and the East Coast economic region, consisting of the states of Florida, Georgia, South Carolina, North Carolina, Virginia, Maryland, Delaware, New Jersey, New York, and the New England states minus land-locked Vermont. This article is motivated by several factors. The first arises out of the increasing emphasis placed by regional and state authorities on stimulating exports. The number of international trade and investment offices as well as export promotion offices of various states has been increasing annually until recently. States regularly schedule trade missions led by senior officials. Indeed, there has been a trickle down effect of this policy initiative on the part of state officials, with city mayors now promoting their metropolitan exports. The primary factor behind this emergent enthusiasm for trade has been the realization, particularly in the coastal states, that exports are increasingly a very sizable part of the gross regional product. The second is the size of the two regional economies--the West Coast and the East Coast economies of the United States, which are larger than all but a few of the world's economies--and the sizable geographic distance separating the two. If these regions are indeed significantly different in their trading patterns and have different influences impacting these patterns, then this study could also contribute to the debate about the role of the nation-state vis-a-vis its constituent regions in the age of increasing globalization. This article looks at exports as well as other global linkages of these coastal economies, such as transnational immigrant and business networks. The coastal states are entrepots not just to trade and investment flows but also to the impact of international social (immigrant) and business networks. Indeed, the two major coastal states, California and New York, are also the largest immigrant states of the union. A significant proportion of the flow of immigrants arrives in these coastal regions; but more importantly, a sizable number of them choose to settle down there. The ease of international travel and the entrepot nature of the coastal ports also leads to a high concentration of transnational business linkages based along the coasts, in the form of foreign direct investment as well as various other forms of business-to-business contacts. Contiguous coastal states belonging to one region share common attributes that distinguish them from the inland states. In contrast to inland states, coastal states are generally the transshipment points for the majority of goods imported and exported, as well as for international flows of people. …