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Impact of the Maquiladora Industry on U.S. Border Cities
Jesus Canas (au)
For decades, the maquiladora industry has been a major economic engine along the U.S.ńˇ˝Mexico border. Since the 1970s, researchers have analyzed how the maquiladora industry affects cities along both sides of the border. Gordon Hanson (2001) produced the first comprehensive study on the impact of the maquiladoras on U.S. border cities, considering the impact of these in-bond plants on both employment and wages. His estimates became useful rules of thumb for the entire U.S.ńˇ˝Mexico border, but have become dated, as they covered the period from 1975 to 1997. This paper updates Hanson's results using data from 1990 to 2006 and extends the estimates to specific border cities. For the border region as a whole, the authors find that the impact of a 10% increase in maquiladora production leads to a 0.5- 0.9% change in employment. However, the border average is quite misleading, with large differences among individual border cities. Cities along the Texasńˇ˝Mexico border benefit the most from growing maquiladora production. They also estimate the cross-border maquiladora impacts before and after 2001 when border security begins to rise, the maquiladora industry entered a severe recession and extensive restructuring and global low-wage competition intensified as China joined the WTO. Figures and tables. This is a print on demand report.
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