Retail Trade on the U.S.-Mexico Border During the NAFTA Implementation Era

When NAFTA was implemented in 1994, there was a general expectation that it would hurt U.S. retailers along the U.S.-Mexico border. This paper asks whether there was a significant change in the pattern of retail trade in border MSAs in the years surrounding NAFTA's implementation. Data from MSAs in the four border states are analyzed. After controlling for other potential influences on retail trade, there remained a statistically significant change in the pattern of retail trade between 1992 and 1997. The changes cannot be unquestionably attributed to NAFTA but do suggest that NAFTA had a negative influence on retail sales on the U.S. side of the border. Copyright 2004 Gatton College of Business and Economics, University of Kentucky..