Impact of the Maquiladora Program on the Level of Intra-Industry Trade between Mexico and the United States

The purpose of this paper is to elucidate on how, in spite of their vastly different stages of development, Mexico and the U.S. exhibit levels of intra-industry trade normally found only among industrialized countries. A time series study using data from 1961 to 1991 tests the importance of variables identified in the literature as determinants of intra-industry commerce. The results reaffirm the direct correlation existing between commerce and investment when intra-industry trade is present. The Mexican Maquiladora(in-bond) industry is found to be the most significant determinant of the high levels of intra-industry trade levels registered between the U.S. and Mexico. Its findings highlight the role in-bond industries play in expanding commerce, specifically intra-industry trade, among nations in unequal stages of development.

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