Measuring the export potential of urban regions: A case study from Appalachia, USA

The economic benefits from exporting can be very significant for a region. New research shows U.S. export-related jobs pay 20 percent above the national average, productivity growth is three times the national average, and export-related jobs provide the best long-run security. The Southern Appalachian region of the U.S. provides an excellent case study. It has an economic base rich in the production of agricultural, mining, and manufactured goods which are easily exported. This paper investigates the extent to which the local population is benefiting from exporting of these products. Foreigh trade zones are a special legal status granted to airports, warehouses and manufacturing plants. This status provides a wide range of cost and administrative benefits to firms engaged in international commerce. The U.S. government has recently released two studies on export-related employment and the value of exports originating in metropolitan areas. These data sources will be used to measure the export performance for several MSAs within the Southern Appalachia. Site visits will be done for two MSAs - Tri-Cities, TN-VA and Huntsville, AL. The measures of export potential developed from data provided from the new studies can identify regions where export activity continues to hold signifcant potential or where the current level of exports may be at their maximum. Supplemented by site visits, this preliminary information can be verified or revised. The greatest benefits attached to the operation of an FTZ were found to be indirect rather than associated with the operation of the FTZ itself. The major impact of the FTZ is felt through the creation of a Customs service office and the creation of Subzones. FTZs may hold significant promise for the promotion of export activity in interior cities of Europe as well. This study was recently funded as "An Emerging Issues Paper" by the Appalachian Regional Commission, Washington, D.C.