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North American Economic Integration and Industry Location

Listed author(s):
  • Gordon H. Hanson

Does regional economic integration affect the location of economic activity inside countries? In this paper, I discuss recent academic literature on whether the movement towards free trade in North America has influenced the spatial organization of production in Canada, Mexico, or the United States. In Mexico, closer economic ties with the United States appear to have contributed to a contraction of employment in the Mexico City manufacturing belt, a rapid expansion of manufacturing employment in northern Mexico, and an increase in the wage premia paid to skilled workers. The effects of economic integration on industry location in Canada and the United States seem to have been much weaker. On exception to this finding is U.S. cities on the Mexican border, whose employment growth is strongly positively correlated with export production in neighboring Mexican regions. I also discuss implications of a possible hemispheric free trade agreement.

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File URL: http://www.nber.org/papers/w6587.pdf
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 6587.

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Date of creation: Jun 1998
Publication status: published as Oxford Review of Economic Policy, Vol. 14 (1998): 30-44.
Handle: RePEc:nbr:nberwo:6587
Note: ITI
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  1. Hanson, G.H., 1999. "`Market Potential, Increasing Returns, and Geographic Concentration," Working Papers 439, Research Seminar in International Economics, University of Michigan.
  2. Robert C. Feenstra & Gordon H. Hanson, 1995. "Foreign Investment, Outsourcing and Relative Wages," NBER Working Papers 5121, National Bureau of Economic Research, Inc.
  3. Gianmarco I. P. Ottaviano & Diego Puga, 1997. "Agglomeration in a global economy: a survey," LSE Research Online Documents on Economics 20324, London School of Economics and Political Science, LSE Library.
  4. Rauch James E., 1993. "Productivity Gains from Geographic Concentration of Human Capital: Evidence from the Cities," Journal of Urban Economics, Elsevier, vol. 34(3), pages 380-400, November.
  5. Gordon H. Hanson, 1994. "Localization Economies, Vertical Organization and Trade," NBER Working Papers 4744, National Bureau of Economic Research, Inc.
  6. Henderson, Vernon & Kuncoro, Ari & Turner, Matt, 1995. "Industrial Development in Cities," Journal of Political Economy, University of Chicago Press, vol. 103(5), pages 1067-1090, October.
  7. Krugman, Paul & Venables, Anthony J., 1995. "Globalization and the Inequality of Nations," Working Paper Series 430, Research Institute of Industrial Economics.
  8. Diego Puga & Tony Venables, 1995. "Preferential trading arrangements and industrial location," LSE Research Online Documents on Economics 2151, London School of Economics and Political Science, LSE Library.
  9. Olivier Jean Blanchard & Lawrence F. Katz, 1992. "Regional Evolutions," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 23(1), pages 1-76.
  10. Fujita,Masahisa & Thisse,Jacques-François, 2013. "Economics of Agglomeration," Cambridge Books, Cambridge University Press, number 9780521171960.
  11. Diego Puga, 1996. "The Rise and Fall of Regional Inequalities," CEP Discussion Papers dp0314, Centre for Economic Performance, LSE.
  12. Henderson, J. Vernon, 1991. "Urban Development: Theory, Fact, and Illusion," OUP Catalogue, Oxford University Press, number 9780195069020.
  13. Krugman, Paul & Elizondo, Raul Livas, 1996. "Trade policy and the Third World metropolis," Journal of Development Economics, Elsevier, vol. 49(1), pages 137-150, April.
  14. Richard B. Freeman, 1995. "Are Your Wages Set in Beijing?," Journal of Economic Perspectives, American Economic Association, vol. 9(3), pages 15-32, Summer.
  15. Guy Dumais & Glenn Ellison & Edward L Glaeser, 1998. "Geographic Concentration as a Dynamic Process," Working Papers 98-3, Center for Economic Studies, U.S. Census Bureau.
  16. James E. Rauch, 1990. "Comparative Advantage, Geographic Advantage, and the Volume of Trade," NBER Working Papers 3512, National Bureau of Economic Research, Inc.
  17. Venables, Anthony J, 1993. "Equilibrium Locations of Vertically Linked Industries," CEPR Discussion Papers 802, C.E.P.R. Discussion Papers.
  18. Antonio Ciccone & Robert E. Hall, 1995. "Productivity and the density of economic activity," Economics Working Papers 120, Department of Economics and Business, Universitat Pompeu Fabra.
  19. 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.
  20. repec:hhs:iuiwop:430 is not listed on IDEAS
  21. Edward L. Glaeser & Hedi D. Kallal & Jose A. Scheinkman & Andrei Shleifer, 1991. "Growth in Cities," NBER Working Papers 3787, National Bureau of Economic Research, Inc.
    • Glaeser, Edward Ludwig & Kallal, Hedi D. & Scheinkman, Jose A. & Shleifer, Andrei, 1992. "Growth in Cities," Scholarly Articles 3451309, Harvard University Department of Economics.
  22. Feenstra, Robert C. & Hanson, Gordon H., 1997. "Foreign direct investment and relative wages: Evidence from Mexico's maquiladoras," Journal of International Economics, Elsevier, vol. 42(3-4), pages 371-393, May.
  23. Gordon H. Hanson, 1994. "Regional Adjustment to Trade Liberalization," NBER Working Papers 4713, National Bureau of Economic Research, Inc.
  24. Hanson, Gordon H, 1997. "Increasing Returns, Trade and the Regional Structure of Wages," Economic Journal, Royal Economic Society, vol. 107(440), pages 113-133, January.
  25. Hanson, Gordon H., 1996. "Economic integration, intraindustry trade, and frontier regions," European Economic Review, Elsevier, vol. 40(3-5), pages 941-949, April.
  26. Head, Keith & Ries, John & Swenson, Deborah, 1995. "Agglomeration benefits and location choice: Evidence from Japanese manufacturing investments in the United States," Journal of International Economics, Elsevier, vol. 38(3-4), pages 223-247, May.
  27. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-499, June.
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