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  3. American Economic Review
  4. September 2009
  5. Offshoring and Volatility: Evidence from Mexico's Maquiladora Industry

American Economic Review

ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)

Offshoring and Volatility: Evidence from Mexico's Maquiladora Industry

  • Paul R. Bergin
  • Robert C. Feenstra
  • Gordon H. Hanson
American Economic Review
vol. 99, no. 4, September 2009
(pp. 1664–71)
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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. (JEL F14, F23, L24, L25, L60, O14)

Citation

Bergin, Paul R., Robert C. Feenstra, and Gordon H. Hanson. 2009. "Offshoring and Volatility: Evidence from Mexico's Maquiladora Industry." American Economic Review, 99 (4): 1664–71. DOI: 10.1257/aer.99.4.1664

Additional Materials

JEL Classification

  • F14 Country and Industry Studies of Trade
  • F23 Multinational Firms; International Business
  • L24 Contracting Out; Joint Ventures; Technology Licensing
  • L25 Firm Performance: Size, Diversification, and Scope
  • L60 Industry Studies: Manufacturing: General
  • O14 Industrialization; Manufacturing and Service Industries; Choice of Technology