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I’ve Been Everywhere (Except Mexico): Investor Responses to NAFTA’s Cross-Border Trucking Provisions

Author

Listed:
  • Ronald B Davies

    (University College Dublin)

  • Benjamin H Liebman

    (St. Joseph’s University, Philadelphia)

  • Kasaundra Tomlin

    (Oakland University, Rochester)

Abstract

We investigate the response of US trucking firms to the removal of barriers to crossborder trucking under NAFTA. This was done via a program implemented in 2007, cancelled in 2009, and reinstated in 2011. We find that, unsurprisingly, the program’s start resulted in lower stock returns, particularly for border firms. However, later policy changes indicate that investors, and particularly those in US multinationals, viewed the pilot as beneficial. We use a model of endogenous exporting to show that this can arise from incorrect expectations of import competition.

Suggested Citation

  • Ronald B Davies & Benjamin H Liebman & Kasaundra Tomlin, 2015. "I’ve Been Everywhere (Except Mexico): Investor Responses to NAFTA’s Cross-Border Trucking Provisions," Working Papers 201501, School of Economics, University College Dublin.
    • Handle: RePEc:ucn:wpaper:201501
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    References listed on IDEAS

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    1. Benjamin H. Liebman & Kasaundra M. Tomlin, 2008. "Safeguards and Retaliatory Threats," Journal of Law and Economics, University of Chicago Press, vol. 51(2), pages 351-376, May.
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    7. Matthew T. Cole (University College Dublin) Ronald B. Davies (University College Dublin), 2009. "Optimal Tariffs, Tariff Jumping, and Heterogeneous Firms," The Institute for International Integration Studies Discussion Paper Series iiisdp302, IIIS.
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    Cited by:

    1. Davies, Ronald B. & Studnicka, Zuzanna, 2018. "The heterogeneous impact of Brexit: Early indications from the FTSE," European Economic Review, Elsevier, vol. 110(C), pages 1-17.

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    More about this item

    Keywords

    Non-tariff Barriers; Services; Commercial Policy; Protection; Promotion; Trade Negotiations;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F15 - International Economics - - Trade - - - Economic Integration
    • F20 - International Economics - - International Factor Movements and International Business - - - General

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