Monthly Archives: May 2014

ECONOMIC INTEGRATION AND INDUSTRY LOCATION: HEMISPHERIC INTEGRATION AND INDUSTRY LOCATION 4

Post Image

The country in which industry agglomerates serves as a hub, purchasing intermediate inputs from other member countries, which trade mainly with the hub country and relatively little with each other. In some respects, the United States operates as a hub for the North American economy. The U.S. auto industry is supported by auto-parts production in […]

Read More

ECONOMIC INTEGRATION AND INDUSTRY LOCATION: HEMISPHERIC INTEGRATION AND INDUSTRY LOCATION 3

Post Image

Other aspects of adjustment to hemispheric free trade would likely resemble the transition process in Mexico. The reduction of trade barriers in Central American and Caribbean countries, which occurred during the 1980’s, has been followed by an expansion of maquiladora-type plants and specialization in the assembly of imported intermediate inputs for export, mainly in apparel […]

Read More

ECONOMIC INTEGRATION AND INDUSTRY LOCATION: HEMISPHERIC INTEGRATION AND INDUSTRY LOCATION 2

Third, a large fraction of Mexico-U.S. trade is in intermediate inputs for manufacturing. In the move to free trade, Mexico is specializing in specific manufacturing processes, such as the product assembly done by maquiladoras, within specific manufacturing industries. The expansion of Mexico-U.S. trade has brought with it the creation of vertical supply relationships between U.S. […]

Read More

ECONOMIC INTEGRATION AND INDUSTRY LOCATION: HEMISPHERIC INTEGRATION AND INDUSTRY LOCATION

Post Image

What does the prospect of future hemispheric economic integration hold for industry location in North America? In considering this question, it is worthwhile to summarize the factors that have contributed to recent regional employment changes in the region. The most dramatic spatial movements in production have occurred in Mexico, with the breakup of the Mexico […]

Read More

ECONOMIC INTEGRATION AND INDUSTRY LOCATION: Mexico-U.S. Trade and the U.S. Border Economy 2

Post Image

The empirical findings suggest that economic integration between countries is associated with the expansion of production in border regions. A 10.0% increase in export manufacturing in a Mexican border city is associated with a 1.5% to 2.0% increase in employment in the neighboring U.S. border city. This effect is substantial when one considers that export […]

Read More

ECONOMIC INTEGRATION AND INDUSTRY LOCATION: Mexico-U.S. Trade and the U.S. Border Economy

What are the implications of Mexico-U.S. economic integration for regional economies in the United States? The expansion of maquiladora-based trade represents expanding vertical supply linkages between U.S. and Mexican firms. It seems clear that these linkages have helped pull economic activity northward in Mexico. In principle, Mexico-U.S. trade could also pull U.S. production southward. In […]

Read More

ECONOMIC INTEGRATION AND INDUSTRY LOCATION: Mexico-U.S. Integration and the Structure of Wages in Mexico 3

Post Image

If wages differ between nations, the North specializes in high-skill tasks, such as research and design, and the South specializes in low-skill tasks, such as the product assembly performed by maquiladoras. If we allow Northern firms to outsource production to the South, they will choose to move the least skill-intensive activities that they perform. By […]

Read More

ECONOMIC INTEGRATION AND INDUSTRY LOCATION: Mexico-U.S. Integration and the Structure of Wages in Mexico 2

Post Image

An important question is how Mexico-U.S. trade, in general, and the growth of maquiladoras, in particular, will affect the relative demand for different factors of production in the two countries. In the United States, the impact of trade with low-wage countries on the earnings of U.S. workers has received considerable attention. Over the last two […]

Read More

ECONOMIC INTEGRATION AND INDUSTRY LOCATION: Mexico-U.S. Integration and the Structure of Wages in Mexico

Trade reform in Mexico has lead to a dramatic increase in Mexico-U.S. trade, which has further expanded following the passage of NAFTA in 1994. Table 5 shows U.S. trade with Mexico from 1980 to 1995. A large fraction of U.S.-Mexico trade in manufactured products is the result of U.S. multinational firms establishing export assembly plants, […]

Read More

ECONOMIC INTEGRATION AND INDUSTRY LOCATION: Regional Economic Growth in Mexico Before and After Trade Reform 2

The findings suggest that access to foreign markets influences industry location. Prior to trade reform, there is zero correlation between regional industry employment growth and distance to the United States. But after trade reform, the correlation is strongly negative. As Table 3 suggests, the locus of manufacturing activity in Mexico is shifting towards the U.S. […]

Read More
Pages: 1 2 Next