American Economic Review Vol. 99 No. 4 2009

Offshoring and Volatility: Evidence from Mexico's Maquiladora Industry

Paul R. Bergin¹; Robert C. Feenstra¹; Gordon Hanson²

¹ Department of Economics, University of California at Davis, One Shields Ave., Davis, CA 95616. · ² University of California, San Diego, 9500 Gilman Dr., MC: 0519, La Jolla, CA 92093-0519.

Abstract

This paper studies the second-moment properties of offshoring, the arrangement whereby firms carry out particular stages of production abroad. It documents a new empirical regularity: maquiladora industries in Mexico that are associated with US offshoring experience fluctuations in employment that are twice as volatile as the corresponding industries in the United States. This finding is not attributable simply to higher volatility in the overall Mexican economy, nor to the smaller size of Mexico's industries compared to US counterparts.

DOI

10.1257/aer.99.4.1664

Volume

99

Issue

4

Pages

1664-1671

Language

en

Sources

openalex bibtex:phds-export.bib crossref

Cite

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