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Analyzing the export flow from Texas to Mexico

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  • Andrew J. Cassey

Abstract

From 1997 to 2008, Texas shipped 40 percent of its manufacturing exports to Mexico. This puts Texas-Mexico among the largest state-country trading relationships. But this share has been declining recently. A gravity equation cannot account for either of these facts, even though Texas and Mexico share a border. This positive contiguity effect is not unique in state export data. I study the features of the Texas-Mexico relationship to try to account for the size of the export flow and the recent decline in share. Data limitations prevent a full accounting, but the most likely feature is the changing source of maquiladora inputs from the United States to Asia

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File URL: http://www.dallasfed.org/assets/documents/research/staff/staff1003.pdf
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Bibliographic Info

Article provided by Federal Reserve Bank of Dallas in its journal Staff Papers.

Volume (Year): (2010)
Issue (Month): Oct ()
Pages:

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Handle: RePEc:fip:feddst:y:2010:i:oct:n:11

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Keywords: Texas ; Mexico ; Maquiladora ; Mexican-American Border Region - Economic conditions ; International trade ; Exports;

References

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  1. Cletus C. Coughlin & Dennis Novy, 2009. "Is the international border effect larger than the domestic border effect? evidence from U.S. trade," Working Papers 2009-057, Federal Reserve Bank of St. Louis.
  2. Joao Santos Silva & Silvana Tenreyro, 2005. "The Log of Gravity," CEP Discussion Papers dp0701, Centre for Economic Performance, LSE.
  3. James E. Anderson & Eric van Wincoop, 2003. "Gravity with Gravitas: A Solution to the Border Puzzle," American Economic Review, American Economic Association, vol. 93(1), pages 170-192, March.
  4. McCallum, John, 1995. "National Borders Matter: Canada-U.S. Regional Trade Patterns," American Economic Review, American Economic Association, vol. 85(3), pages 615-23, June.
  5. Cletus C. Coughlin, 2004. "The increasing importance of proximity for exports from U.S. states," Review, Federal Reserve Bank of St. Louis, issue Nov, pages 1-18.
  6. Peter Egger, . "A Note on the Proper Econometric Specification of the Gravity Equation," WIFO Working Papers 108, WIFO.
  7. Andrew J. Cassey, 2008. "California's Exports and the 2004 Overseas Office Closures," Working Papers 2008-28, School of Economic Sciences, Washington State University.
  8. Elhanan Helpman & Marc Melitz & Yona Rubinstein, 2008. "Estimating Trade Flows: Trading Partners and Trading Volumes," The Quarterly Journal of Economics, MIT Press, vol. 123(2), pages 441-487, 05.
  9. Céline Carrère & Maurice Schiff, 2005. "On the Geography of Trade. Distance is Alive and Well," Revue économique, Presses de Sciences-Po, vol. 56(6), pages 1249-1274.
  10. Thomas Chaney, 2008. "Distorted Gravity: The Intensive and Extensive Margins of International Trade," American Economic Review, American Economic Association, vol. 98(4), pages 1707-21, September.
  11. Jesus Canas & Roberto Coronado & Robert W. Gilmer, 2005. "Texas border employment and maquiladora growth," Monograph, Federal Reserve Bank of Dallas, number 2005tbeam.
  12. Anderson, James E, 1979. "A Theoretical Foundation for the Gravity Equation," American Economic Review, American Economic Association, vol. 69(1), pages 106-16, March.
  13. Pia M. Orrenius & Keith Phillips & Benjamin Blackburn, 2001. "Beating border barriers in U.S.-Mexico trade," Southwest Economy, Federal Reserve Bank of Dallas, issue Sep, pages 1-8.
  14. Russell Hillberry & David Hummels, 2005. "Trade Responses to Geographic Frictions: A Decomposition Using Micro-Data," NBER Working Papers 11339, National Bureau of Economic Research, Inc.
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Cited by:
  1. Tomasz Brodzicki & Stanislaw Uminski, 2013. "International trade relations of enterprises established in Poland's regions: gravity model panel estimation," Working Papers 1301, Instytut Rozwoju, Institute for Development.

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