Offshoring and Volatility: Evidence from Mexico's Maquiladora Industry | Zendy

Paul R. Bergin | Zendy; Robert C. Feenstra | Zendy; Gordon Hanson | Zendy

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Offshoring and Volatility: Evidence from Mexico's Maquiladora Industry

Author(s) -

Paul R. Bergin,

Robert C. Feenstra,

Gordon Hanson

Publication year - 2009

Publication title -

american economic review

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 16.936

H-Index - 297

eISSN - 1944-7981

pISSN - 0002-8282

DOI - 10.1257/aer.99.4.1664

Subject(s) - offshoring , volatility (finance) , economics , empirical evidence , monetary economics , outsourcing , business , financial economics , marketing , philosophy , epistemology

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)

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