Short-run maquiladora employment dynamics

Short-run maquiladora employment dynamics in Tijuana

“…Regressor lag lengths appear in parentheses. Similar to the results reported for Ciudad Jua´rez in Fullerton and Schauer (2001), all of the regressor series are found to impact maquiladora employment in Tijuana within periods of twelve months or less. Moreover, all of the coefficients exhibit the algebraic signs hypothesized in Sect.…”

“…Unlike the model obtained for Ciudad Jua´rez, however, real wages impact on the demand for workers in Tijuana after a lag of twelve months. In line with the results obtained by Fullerton and Schauer (2001), the payroll reaction time with respect to changes in the real value of the peso differs from that associated with real wages. While both variables affect the dollar denominated cost of the labor inputs, heterogeneous lag structures associated with factor price and exchange rate variables are fairly common in international trade functions estimated for Latin American economies (Fullerton et al 1999).…”

“…This potentially reflects the influence of just-in-time inventory management practices and greater integration of the two national economies in recent decades. Because the reaction time is quicker than that exhibited by maquiladora employment in Ciudad Jua´rez (Fullerton and Schauer 2001), it may also reflect the lower Mexican government institutional barriers historically in place between peninsular Baja California and the United States. Autoregressive and moving-average terms included at lag 12 also satisfy the 5-percent criterion.…”

“…More recently, Gruben and Kiser (2001) conclude that international wage ratios and the growth rate of U.S. industrial production will remain the most important causal factors behind future maquiladora expansion throughout the country. Fullerton and Schauer (2001) employ traditional transfer function AR-IMA time series analysis to study maquiladora payroll fluctuations in Ciudad Jua´rez. Similar to some of the previously cited work, central roles of United States business cycles, real wages, and currency valuations are confirmed for this important metropolitan economy.…”

“…Fullerton and Schauer (2001) analyze short-run maquiladora employment dynamics for Ciudad Juarez, the city with the greatest number of maquiladora jobs in Mexico. According to this study, in-bond assembly payrolls respond very quickly to wage rate changes and industrial activity in the United States, and less rapidly to exchange rate variations for the peso.…”