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Peso Acceptance Patterns in El Paso


  • Fullerton, Thomas M., Jr.
  • Molina, Angel L., Jr.
  • Pisani, Michael J.


This paper examines the acceptance of peso payments, or currency substitution reverse dollarization, by U.S retail firms near the international border with Mexico. Survey data are drawn from a stratified random sample of 586 retailers located in El Paso, Texas, situated across the border from Ciudad Juarez, Chihuahua, Mexico. Approximately 13 percent of the participant firms accept Mexican pesos in exchange for goods and services. Empirical results indicate that factors such as a firm’s percentage of Spanish speaking employees and distance to the nearest international bridge significantly influence the decision to accept or reject Mexican pesos.

Suggested Citation

  • Fullerton, Thomas M., Jr. & Molina, Angel L., Jr. & Pisani, Michael J., 2009. "Peso Acceptance Patterns in El Paso," MPRA Paper 17900, University Library of Munich, Germany, revised 19 Jun 2009.
  • Handle: RePEc:pra:mprapa:17900

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    References listed on IDEAS

    1. Prock, Jerry & Soydemir, Gokce A. & Abugri, Benjamin A., 2003. "Currency substitution: Evidence from Latin America," Journal of Policy Modeling, Elsevier, vol. 25(4), pages 415-430, June.
    2. Darren Hudson & Lee-Hong Seah & Diane Hite & Tim Haab, 2004. "Telephone presurveys, self-selection, and non-response bias to mail and Internet surveys in economic research," Applied Economics Letters, Taylor & Francis Journals, vol. 11(4), pages 237-240.
    3. Fullerton, T.M., 2007. "Empirical Evidence Regarding 9/11 Impacts on the Borderplex Economy," Regional and Sectoral Economic Studies, Euro-American Association of Economic Development, vol. 7(2), pages 51-64.
    4. Kingston, Geoffrey & Melecky, Martin, 2007. "Currency preferences and the Australian dollar," Journal of International Money and Finance, Elsevier, vol. 26(3), pages 454-467, April.
    5. Ajay Tandon & Yong Wang, 2003. "Confidence in Domestic Money and Currency Substitution," Economic Inquiry, Western Economic Association International, vol. 41(3), pages 407-419, July.
    6. Yoskowitz, David W. & Pisani, Michael J., 2007. "Risk and reward: Currency substitution and acceptance of the Mexican peso by firms in the United States southern frontier," The Quarterly Review of Economics and Finance, Elsevier, vol. 47(3), pages 422-434, July.
    7. Rogers, John H, 1992. "The Currency Substitution Hypothesis and Relative Money Demand in Mexico and Canada," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 24(3), pages 300-318, August.
    8. Murray, John & Powell, James, 2003. "Dollarization in Canada: where does the buck stop?," The North American Journal of Economics and Finance, Elsevier, vol. 14(2), pages 145-172, August.
    9. Miriam Chau RodrIGuez & Paul Turner, 2003. "Currency substitution and the demand for money in Mexico," Applied Economics Letters, Taylor & Francis Journals, vol. 10(1), pages 59-62.
    10. Ortiz, Guillermo, 1983. "Currency Substitution in Mexico: The Dollarization Problem," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 15(2), pages 174-185, May.
    11. Graeff, Timothy R., 2002. "Uninformed response bias in telephone surveys," Journal of Business Research, Elsevier, vol. 55(3), pages 251-259, March.
    12. Selcuk, Faruk, 2003. "Currency substitution: new evidence from emerging economies," Economics Letters, Elsevier, vol. 78(2), pages 219-224, February.
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    Cited by:

    1. Michael J. Pisani & Thomas M. Fullerton, Jr., 2013. "Microenterprise Peso Acceptance in El Paso, Texas," Ensayos Revista de Economia, Universidad Autonoma de Nuevo Leon, Facultad de Economia, vol. 0(2), pages 75-94, November.
    2. Kincal, Gokce & Fullerton, Thomas M., Jr. & Holcomb, James H. & Barraza de Anda, Martha P., 2010. "Cross Border Business Cycle Impacts on the El Paso Housing Market," MPRA Paper 29095, University Library of Munich, Germany, revised 2010.

    More about this item


    Currency Substitution; Mexican Peso; Border Economics; Probit Models;

    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics

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