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The effects of currency fluctuations and trade integration on industry trade between Canada and Mexico

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  • Bahmani-Oskooee, Mohsen
  • Bolhassani, Marzieh
  • Hegerty, Scott W.

Abstract

Since studies of North American trade flows tend to focus on the United States as the main trading partner, trade between Canada and Mexico has received relatively little attention. Here, we examine bilateral trade flows for 62 Canadian export industries to Mexico and 45 import industries from Mexico to assess the effects of currency fluctuations and trade integration on these individual trade flows. We find that Mexico's largest export industries respond to depreciation more than Canada's largest export industries do. Both countries' trade flows are influenced even more by trade integration. Since there is evidence of strong intra-industry trade between these two countries, we can attribute this effect to the exploitation of economies of scale.

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Bibliographic Info

Article provided by Elsevier in its journal Research in Economics.

Volume (Year): 64 (2010)
Issue (Month): 4 (December)
Pages: 212-223

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Handle: RePEc:eee:reecon:v:64:y:2010:i:4:p:212-223

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Web page: http://www.elsevier.com/locate/inca/622941

Related research

Keywords: Canada Mexico Industry trade Bounds testing;

References

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Cited by:
  1. Mohsen Bahmani-Oskooee & Hanafiah Harvey & Scott Hegerty, 2013. "Currency fluctuations and the French–U.S. trade balance: evidence from 118 industries," Empirica, Springer, vol. 40(2), pages 237-257, May.

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