IDEAS home Printed from https://ideas.repec.org/a/fip/fedder/y2001iqiiip11-21.html
   My bibliography  Save this article

Was NAFTA behind Mexico's high maquiladora growth?

Author

Listed:
  • William C. Gruben

Abstract

Although Mexico's maquiladora system is an important and well-recognized component of Mexico-U.S. trade, the connection between the acceleration in maquiladora growth and NAFTA is less clearly understood. A broad cross section of observers -- including journalists, political activists, industry analysts, and academics -- argue that Mexico's maquiladoras have been strongly influenced by NAFTA and have grown rapidly as a result. William C. Gruben finds no such connection when he tests for NAFTA's contribution to fluctuations in maquiladora employment. Instead, he finds that maquiladoras' post-NAFTA growth is connected to changes in Mexican wages relative to those in Asia and the United States and to fluctuations in U.S. industrial production. For every 1 percent change in U.S. industrial production , maquiladora employment changes between 1.2 percent and 1.3 percent. This connection is consistent with declining maquiladora employment in 2001, as U.S. industrial production has fallen, but is not consistent with the contention that NAFTA was responsible for Mexico's high maquiladora growth.

Suggested Citation

  • William C. Gruben, 2001. "Was NAFTA behind Mexico's high maquiladora growth?," Economic and Financial Policy Review, Federal Reserve Bank of Dallas, issue Q III, pages 11-21.
    • Handle: RePEc:fip:fedder:y:2001:i:qiii:p:11-21
    as

    Download full text from publisher

    File URL: https://www.dallasfed.org/~/media/documents/research/efr/2001/efr0103b.pdf
    File Function: Full Text
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. LILA J. Truett & DALE B. Truett, 1993. "Maquiladora Response To U.S. And Asian Relative Wage Rate Changes," Contemporary Economic Policy, Western Economic Association International, vol. 11(1), pages 18-28, January.
    2. William C. Gruben, 1989. "Do maquiladoras take American jobs? Some tentative econometric results," Working Papers 8913, Federal Reserve Bank of Dallas.
    3. David M. Gould, 1998. "Has NAFTA changed North American trade?," Economic and Financial Policy Review, Federal Reserve Bank of Dallas, issue Q 1, pages 12-23.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Amador, João & Cabral, Sónia, 2014. "Global value chains: surveying drivers and measures," Working Paper Series 1739, European Central Bank.
    2. Hazarika, Gautam & Otero, Rafael, 2008. "North-South Trade Liberalization and Returns to Skill in the South: The Case of Mexico," IZA Discussion Papers 3788, Institute of Labor Economics (IZA).
    3. Utar, Hale & Ruiz, Luis B. Torres, 2013. "International competition and industrial evolution: Evidence from the impact of Chinese competition on Mexican maquiladoras," Journal of Development Economics, Elsevier, vol. 105(C), pages 267-287.
    4. Kurt LOESS & Van V. MILLER & David YOSKOWITZ, 2008. "Offshore employment practices: An empirical analysis of routines, wages and labour turnover," International Labour Review, International Labour Organization, vol. 147(2-3), pages 249-273, June.
    5. Julio Huato, 2005. "Maquiladoras and Standard of Living in Mexico Before and After NAFTA," Development and Comp Systems 0508006, University Library of Munich, Germany.
    6. Sargent, John & Matthews, Linda, 2004. "What Happens When Relative Costs Increase in Export Processing Zones? Technology, Regional Production Networks, and Mexico's Maquiladoras," World Development, Elsevier, vol. 32(12), pages 2015-2030, December.
    7. Mollick, Andre Varella & Wvalle-Vazquez, Karina, 2006. "Chinese competition and its effects on Mexican maquiladoras," Journal of Comparative Economics, Elsevier, vol. 34(1), pages 130-145, March.
    8. Zlate, Andrei, 2016. "Offshore production and business cycle dynamics with heterogeneous firms," Journal of International Economics, Elsevier, vol. 100(C), pages 34-49.
    9. Berndt Christian, 2004. "Regionalentwicklung im Kontext globalisierter Produktionssysteme?: Das Beispiel Ciudad Juárez, Mexiko1," ZFW – Advances in Economic Geography, De Gruyter, vol. 48(1), pages 81-97, October.
    10. João Amador & Sónia Cabral, 2014. "Global Value Chains: Surveying Drivers, Measures and Impacts," Working Papers w201403, Banco de Portugal, Economics and Research Department.
    11. Mollick, André Varella, 2009. "Employment Responses of Skilled and Unskilled Workers at Mexican Maquiladoras: The Effects of External Factors," World Development, Elsevier, vol. 37(7), pages 1285-1296, July.
    12. Ruth Banomyong, 2010. "Supply Chain Dynamics in Asia," Working Papers id:3028, eSocialSciences.
    13. Jessica E. Mullan & Martin F. Kenney & Rafiq Dossani, 2008. "Mexico and the Globalization of Services: Outflanked Once Again?," Economía Mexicana NUEVA ÉPOCA, CIDE, División de Economía, vol. 0(2), pages 171-202, July-Dece.
    14. Keith Phillips & Jesus Cañas, 2008. "Regional business cycle integration along the US–Mexico border," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 42(1), pages 153-168, March.
    15. Lila J. Truett & Dale B. Truett, 2007. "Nafta And The Maquiladoras: Boon Or Bane?," Contemporary Economic Policy, Western Economic Association International, vol. 25(3), pages 374-386, July.
    16. 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.
    17. repec:hal:journl:dumas-00910194 is not listed on IDEAS
    18. Thomas M. Fullerton, Jr. & Juan Carlos Vázquez Morales & Martha Patricia Barraza de Anda, 2011. "Dinamica de corto plazo del empleo en las maquiladoras de Reynosa, Tamaulipas," Ensayos Revista de Economia, Universidad Autonoma de Nuevo Leon, Facultad de Economia, vol. 0(1), pages 23-40, May.
    19. Ruth Banomyong, 2010. "Supply Chain Dynamics in Asia," Trade Working Papers 22879, East Asian Bureau of Economic Research.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. William C. Gruben, 2001. "Did NAFTA really cause Mexico's high maquiladora growth?," Center for Latin America Working Papers 0301, Federal Reserve Bank of Dallas.
    2. Thomas L. Vollrath & Mark J. Gehlhar & Charles B. Hallahan, 2009. "Bilateral Import Protection, Free Trade Agreements, and Other Factors Influencing Trade Flows in Agriculture and Clothing," Journal of Agricultural Economics, Wiley Blackwell, vol. 60(2), pages 298-317, June.
    3. John Romalis, 2007. "NAFTA's and CUSFTA's Impact on International Trade," The Review of Economics and Statistics, MIT Press, vol. 89(3), pages 416-435, August.
    4. M. Ayhan Kose & Guy M. Meredith & Christopher M. Towe, 2005. "How Has NAFTA Affected the Mexican Economy? Review and Evidence," Springer Books, in: Rolf J. Langhammer & Lúcio Vinhas Souza (ed.), Monetary Policy and Macroeconomic Stabilization in Latin America, pages 35-81, Springer.
    5. World Bank, 2014. "Costa Rica : Five Years after CAFTA-DR, Assessing Early Results for the Costa Rican Economy," World Bank Publications - Reports 20010, The World Bank Group.
    6. Erick Elder & Mark Funk & Ashvin Vibhakar & Vincent W. Yao, 2006. "Intra-NAFTA trade and surface traffic: a very disaggregated view," Regional Economic Development, Federal Reserve Bank of St. Louis, issue Oct, pages 87-99.
    7. Jorge Ibarra Salazar & Francisco García Pérez, 2016. "Las demandas de factores productivos en la industria maquiladora," Estudios Económicos, El Colegio de México, Centro de Estudios Económicos, vol. 31(2), pages 265-303.
    8. Friederike Koehler-Geib & Susana M. Sanchez, 2015. "Costa Rica Five Years after CAFTA-DR," World Bank Publications - Books, The World Bank Group, number 22013.
    9. Mary E. Burfisher & Sherman Robinson & Karen Thierfelder, 2001. "The Impact of NAFTA on the United States," Journal of Economic Perspectives, American Economic Association, vol. 15(1), pages 125-144, Winter.
    10. Pennelope Pacheco-Lopez & Anthony P. Thirlwall, 2004. "Trade liberalisation in Mexico: rhetoric and reality," Banca Nazionale del Lavoro Quarterly Review, Banca Nazionale del Lavoro, vol. 57(229), pages 141-167.
    11. Howard J. Wall, 2003. "NAFTA and the geography of North American trade," Review, Federal Reserve Bank of St. Louis, vol. 85(Mar), pages 13-26.
    12. Biró, Flóra Panna & Márkus, Ádám & Erdey, László, 2016. "A kormányzás hatása a közvetlen külföldi tőkebefektetésekre Latin-Amerikában," MPRA Paper 80025, University Library of Munich, Germany.
    13. Roland Z. Szabó & Borbála Szedmák & Anna Tajti & Péter Bera, 2023. "Environmental Sustainability, Digitalisation, and the Entrepreneurial Perception of Distances as Drivers of SMEs’ Internationalisation," Sustainability, MDPI, vol. 15(3), pages 1-21, January.
    14. Perez, Maria P. & Ribera, Luis A. & Palma, Marco A., 2017. "Effects of trade and agricultural policies on the structure of the U.S. tomato industry," Food Policy, Elsevier, vol. 69(C), pages 123-134.
    15. Fukao, Kyoji & Okubo, Toshihiro & Stern, Robert M., 2003. "An econometric analysis of trade diversion under NAFTA," The North American Journal of Economics and Finance, Elsevier, vol. 14(1), pages 3-24, March.
    16. Lee, Young-Jae & Kennedy, P. Lynn, 2013. "The Impact Of Nafta On U.S. Agriculture: An Ex-Post, Binary Variable Approach," 2013 Annual Meeting, February 2-5, 2013, Orlando, Florida 142132, Southern Agricultural Economics Association.
    17. Ramirez, Miguel D., 2003. "Mexico under NAFTA: a critical assessment," The Quarterly Review of Economics and Finance, Elsevier, vol. 43(5), pages 863-892.
    18. Mahmood Humaiyid Hamed Al-Wahaibi, 2019. "Logistics Hubs in Oman and Political Uncertainty in the Gulf," Contemporary Review of the Middle East, , vol. 6(2), pages 109-153, June.
    19. Craig Depken & Jon Ford, 1999. "NAFTA as a Means of Raising Rivals' Costs," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 15(2), pages 103-113, September.
    20. Agama, Laurie-Ann & McDaniel, Christine A., 2002. "The NAFTA Preference and U.S.-Mexico Trade," Working Papers 15873, United States International Trade Commission, Office of Economics.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fip:fedder:y:2001:i:qiii:p:11-21. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Amy Chapman (email available below). General contact details of provider: https://edirc.repec.org/data/frbdaus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.