Mexico's border industry and the international division of labor

Abstract

The purpose of this paper is to examine the nature and significance of northern Mexico's rapidly-growingmaquiladora (assembly plant) industry, which has been promoted by policies in both the United States and Mexico. It is argued that this phenomenon is one aspect of the new international division of labor, which can be explained in terms of the related product cycle and spatial-industrial filtering concepts. The evidence suggests that despite problems, both countries have benefited on balance. In addition, the long-term implications of U.S.-Mexican interdependency are considered. The findings indicate that both countries need to adapt to changing international circumstances, but the potential gains from internal reforms are especially great for Mexico.