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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

Suggested Citation

  • Andrew J. Cassey, 2010. "Analyzing the export flow from Texas to Mexico," Staff Papers, Federal Reserve Bank of Dallas, issue Oct.
  • Handle: RePEc:fip:feddst:y:2010:i:oct:n:11
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    File URL: http://www.dallasfed.org/assets/documents/research/staff/staff1003.pdf
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    References listed on IDEAS

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    1. Thomas Chaney, 2008. "Distorted Gravity: The Intensive and Extensive Margins of International Trade," American Economic Review, American Economic Association, vol. 98(4), pages 1707-1721, September.
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    7. Jesus Canas & Roberto Coronado & Robert W. Gilmer, 2005. "Texas border employment and maquiladora growth," Monograph, Federal Reserve Bank of Dallas, number 2005tbeam.
    8. Egger, Peter, 2000. "A note on the proper econometric specification of the gravity equation," Economics Letters, Elsevier, vol. 66(1), pages 25-31, January.
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    13. 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.
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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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