Trade liberalization and regional economies: NAFTA and the United States manufacturing sector.

Abstract

This dissertation observes the effects of increased trade liberalization between the U.S., Canada, and Mexico on the U.S. manufacturing sector between 1980 and 2000 using a panel data approach. I apply the Hecksher-Ohlin model as a framework for this analysis, basing my hypotheses on the HO predictions. The data set employed allows for the estimation of trade effects and includes county level observations for the forty-eight contiguous United States. Specifically, I estimate the effects of increased trade liberalization via international trade agreements and U.S. tariff concessions on average U.S. manufacturing employment, wage, and establishment growth. Likewise, I examine regional economies such as the states located along the U.S. international borders with Canada and Mexico, as well as the sunbelt and manufacturing belt. Lastly, I estimate the effects of increased trade on specific industries in the U.S. manufacturing sector to determine which industries benefit from trade and which industries do not. I also investigate the presence of location effects for counties located relatively close to the international border with Mexico or Canada, relative to counties located further away. The results demonstrate that positive trade and location effects are present.