Abstract
ABSTRACT
The extensive debate over trade liberalization policies in the United States holds a general consensus that some industries will benefit while others will not. This paper explores the impact of the North American Free Trade Agreement on U.S. retailers in states located along the border with Mexico. Overall, the impact of trade on U.S. border retailers has been beneficial. However, the results demonstrate that retailers in the region are vulnerable to exchange rate fluctuations and other macroeconomic influences that change the relative price ratio between the United States and Mexico. Furthermore, retailers in metropolitan statistical areas that have a relatively high concentration of retail sector employment are more susceptible to these changes.