Economic integration, intraindustry trade, and frontier regions

In this paper, I examine how economic integration between the United States and Mexico has affected the location of economic activity in the United Stares. Using a data set on economic activity in U.S.-Mexico border-city pairs, I find that the expansion of export manufacturing in Mexican border cities has increased manufacturing employment in U.S. border cities. The results suggest that the North American Free Trade Agreement will contribute to the relocation of manufacturing production in the United States towards the U.S.-Mexico border region.