MAQUILADORA RESPONSE TO U.S. AND ASIAN RELATIVE WAGE RATE CHANGES

J. Truett Lila and B. Truett Dale

Contemporary Economic Policy, 1993, vol. 11, issue 1, 18-28

Abstract: ThiS paper investigates whether the output of the Mexican maquiladoras is an alternative to production in the Pacific Rim. The analysis involves estimating supply functions for Mexican maquiladora output using relative wage data for Mexico, Singapore, and the United States. It also involves estimating the impact of relative wage rates on maquiladora output in five industries as well as on more aggregated levels. Results indicate that production in Mexico and in the Pacific Rim are substitutes, although this relationship is stronger for some industries than for others.

Date: 1993
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