U.S.-Mexico Integration and Regional Economies: Evidence from Border- City Pairs
AbstractIn this paper, I examine whether U.S.-Mexico economic integration is causing economic activity in the United States to relocate to the U.S.-Mexico border region. The approach I take is to study U.S.- Mexico border-city pairs. Border cities are natural laboratories in which to study the effects of trade policy. To the extent transport costs are the main non-trade policy barriers to trade, we expect regional economic integration to cause economic activity in border cities to expand. I exploit the fact that U.S.-Mexico integration has effectively been underway since the early 1980s. A large portion of U.S.-Mexico trade is the result of U.S. multinationals establishing export assembly operations in Mexico. Mexico's export assembly plants are concentrated in cities on the U.S.-Mexico border. The question I ask is whether the growth of export manufacturing in Mexican border cities increases the demand for goods and services produced in neighboring U.S. border cities. I estimate demand links between Mexican and U.S. border cities using data on the six largest border- city pairs over the period 1975-1989. The results indicate that the growth of export manufacturing in Mexico can account for a substantial portion of employment growth, in general, and of manufacturing employment growth, in particular, in U.S. border cities over the sample period. This suggests that NAFTA will contribute to the formation of binational regional production centers along the U.S.- Mexico border.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 5425.
Date of creation: Jan 1996
Date of revision:
Contact details of provider:
Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Web page: http://www.nber.org
More information through EDIRC
Other versions of this item:
- Hanson, Gordon H., 2001. "U.S.-Mexico Integration and Regional Economies: Evidence from Border-City Pairs," Journal of Urban Economics, Elsevier, vol. 50(2), pages 259-287, September.
- F15 - International Economics - - Trade - - - Economic Integration
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Griliches, Zvi, 1986. "Economic data issues," Handbook of Econometrics, in: Z. Griliches† & M. D. Intriligator (ed.), Handbook of Econometrics, edition 1, volume 3, chapter 25, pages 1465-1514 Elsevier.
- George J. Borjas & Stephen G. Bronars & Stephen J. Trejo, 1992.
"Self-Selection and Internal Migration in the United States,"
NBER Working Papers
4002, National Bureau of Economic Research, Inc.
- Borjas, George J. & Bronars, Stephen G. & Trejo, Stephen J., 1992. "Self-selection and internal migration in the United States," Journal of Urban Economics, Elsevier, vol. 32(2), pages 159-185, September.
- Krugman, Paul & Venables, Anthony J., 1990. "Integration and the Competitiveness of Peripheral Industry," CEPR Discussion Papers 363, C.E.P.R. Discussion Papers.
- Henderson, J. Vernon, 1982. "Systems of cities in closed and open economies," Regional Science and Urban Economics, Elsevier, vol. 12(3), pages 325-350, August.
- Raul Livas Elizondo & Paul Krugman, 1992.
"Trade Policy and the Third World Metropolis,"
NBER Working Papers
4238, National Bureau of Economic Research, Inc.
- Brown, Drusilla K & Deardorff, Alan V & Stern, Robert M, 1992.
"North American Integration,"
Royal Economic Society, vol. 102(415), pages 1507-18, November.
- Krugman, Paul & Venables, Anthony J., 1993.
"Integration, Specialization and Adjustment,"
CEPR Discussion Papers
886, C.E.P.R. Discussion Papers.
- Griliches, Zvi & Hausman, Jerry A., 1986.
"Errors in variables in panel data,"
Journal of Econometrics,
Elsevier, vol. 31(1), pages 93-118, February.
- P Krugman & Anthony J. Venables, 1993. "Intergration," CEP Discussion Papers dp0172, Centre for Economic Performance, LSE.
- repec:fth:michin:312 is not listed on IDEAS
- Engel, Dirk, 1999. "Der Einfluß der Grenznähe auf die Standortwahl von Unternehmen: Eine theoretische Analyse und empirische Befunde für Ostdeutschland," ZEW Discussion Papers 99-18, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
- Nicole Madariaga & Sylvie Montout & Patrice Ollivaud, 2004. "Regional convergence, trade liberalization and agglomeration of activities : an analysis of NAFTA and MERCOSUR cases," Cahiers de la Maison des Sciences Economiques bla04069, Université Panthéon-Sorbonne (Paris 1).
- Gordon H. Hanson, 1997.
"The Effects of Offshore Assembly on Industry Location: Evidence from U.S. Border Cities,"
in: The Effects of U.S. Trade Protection and Promotion Policies, pages 297-322
National Bureau of Economic Research, Inc.
- Gordon H. Hanson, 1995. "The Effects of Offshore Assembly on Industry Location: Evidence from U.S. Border Cities," NBER Working Papers 5400, National Bureau of Economic Research, Inc.
- Kristof Dascher & Alexander Haupt, 2008.
"The Political Economy of Regional Integration Projects at Borders where Rich and Poor Meet: The Role of Cross-Border Shopping and Community Sorting,"
CESifo Working Paper Series
2280, CESifo Group Munich.
- Dascher, Kristof & Haupt, Alexander, 2011. "The political economy of regional integration projects at borders where poor and rich meet: The role of cross-border shopping and community sorting," Journal of Urban Economics, Elsevier, vol. 69(1), pages 148-164, January.
- Miren Lafourcade & Elisenda Paluzie Hernandez, 2005. "European Integration, FDI and the Internal Geography of Trade: Evidence from Western European Border Regions," Working Papers in Economics 145, Universitat de Barcelona. Espai de Recerca en Economia.
- Matthieu Crozet & Pamina Koenig, 2004. "EU Enlargement and the Internal Geography of Countries," Post-Print halshs-00096821, HAL.
- Åslund, Olof & Engdahl, Mattias, 2013.
"1 Open borders, transport links and local labor markets,"
Working Paper Series, Center for Labor Studies
2013:7, Uppsala University, Department of Economics.
- Åslund, Olof & Engdahl, Mattias, 2013. "Open borders, transport links and local labor markets," Working Paper Series 2013:9, Uppsala University, Department of Economics.
- Åslund, Olof & Engdahl, Mattias, 2013. "Open borders, transport links and local labor markets," Working Paper Series 2013:11, IFAU - Institute for Evaluation of Labour Market and Education Policy.
- Harrison, Ann & Rodríguez-Clare, Andrés, 2010.
"Trade, Foreign Investment, and Industrial Policy for Developing Countries,"
Handbook of Development Economics,
- Ann Harrison & Andrés Rodríguez-Clare, 2009. "Trade, Foreign Investment, and Industrial Policy for Developing Countries," NBER Working Papers 15261, National Bureau of Economic Research, Inc.
- Yushi Yoshida & Hiro Ito, 2005. "Distance on FDI and Trade: The Roles of China and Mexico in the Pacific Basin," Discussion Papers 24, Kyushu Sangyo University, Faculty of Economics.
- Peter Huber, 2007.
"Did Previous EU Enlargements Change the Regional Distribution of Production? An Empirical Analysis of Three Enlargement Episodes,"
WIFO Working Papers
- Peter Huber, 2008. "Did previous EU-enlargements change the regional distribution of production? An empirical analysis of three enlargement episodes," International Journal of Public Policy, Inderscience Enterprises Ltd, vol. 3(3/4), pages 187-206.
- Baylis, Kathy & Garduño-Rivera, Rafael & Piras, Gianfranco, 2012.
"The distributional effects of NAFTA in Mexico: Evidence from a panel of municipalities,"
Regional Science and Urban Economics,
Elsevier, vol. 42(1-2), pages 286-302.
- Baylis, Katherine R. & Garduno-Rivera, Rafael & Piras, Gianfranco, 2009. "The distributional effects of NAFTA in Mexico: evidence from a panel of municipalities," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49463, Agricultural and Applied Economics Association.
- Marius Brülhart, 2011.
"The spatial effects of trade openness: a survey,"
Review of World Economics (Weltwirtschaftliches Archiv),
Springer, vol. 147(1), pages 59-83, April.
- Andrzej Cieslik, Bartlomiej Rokicki, 2013. "Regional structure of wages in Poland over the period 1995-2009," Equilibrium, Wydawnictwo Naukowe Uniwersytetu Mikolaja Kopernika, vol. 8, pages 65-78.
- Miren Lafourcade & Elisenda Paluzie, 2008. "European integration, FDI and the geography of French trade," Working Papers halshs-00586834, HAL.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.