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Offshoring and Volatility: Evidence from Mexico's Maquiladora Industry

Author

Listed:
  • Paul R. Bergin
  • Robert C. Feenstra
  • Gordon H. Hanson

Abstract

This paper studies the second-moment properties of offshoring, the arrangement whereby firms carry out particular stages of production abroad. It documents a new empirical regularity: maquiladora industries in Mexico that are associated with US offshoring experience fluctuations in employment that are twice as volatile as the corresponding industries in the United States. This finding is not attributable simply to higher volatility in the overall Mexican economy, nor to the smaller size of Mexico's industries compared to US counterparts. (JEL F14, F23, L24, L25, L60, O14)

Suggested Citation

  • Paul R. Bergin & Robert C. Feenstra & Gordon H. Hanson, 2009. "Offshoring and Volatility: Evidence from Mexico's Maquiladora Industry," American Economic Review, American Economic Association, vol. 99(4), pages 1664-1671, September.
    • Handle: RePEc:aea:aecrev:v:99:y:2009:i:4:p:1664-71
    Note: DOI: 10.1257/aer.99.4.1664
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    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology

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    1. Offshoring and Volatility: Evidence from Mexico's Maquiladora Industry (AER 2009) in ReplicationWiki

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