The effects of currency fluctuations and trade integration on industry trade between Canada and Mexico

Mohsen Bahmani-Oskooee, Marzi Bolhassani, Scott W. Hegerty

Research output: Contribution to journalArticle

6 Scopus citations

Abstract

Since studies of North American trade flows tend to focus on the United States as the main trading partner, trade between Canada and Mexico has received relatively little attention. Here, we examine bilateral trade flows for 62 Canadian export industries to Mexico and 45 import industries from Mexico to assess the effects of currency fluctuations and trade integration on these individual trade flows. We find that Mexico's largest export industries respond to depreciation more than Canada's largest export industries do. Both countries' trade flows are influenced even more by trade integration. Since there is evidence of strong intra-industry trade between these two countries, we can attribute this effect to the exploitation of economies of scale.

Original languageEnglish (US)
Pages (from-to)212-223
Number of pages12
JournalResearch in Economics
Volume64
Issue number4
DOIs
StatePublished - Dec 1 2010

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics

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