Economic Shifts Along the US-Mexico Border: Investigating the Changes in Location Quotient at the Block Level in Four US Border

Abstract

US border cities are often considered “city-pairs” with coinciding Mexican industrial cities. Current literature suggests that the export economy of these Mexican cities increases employment in US border cities for the transport/warehousing, retail trade, and manufacturing sectors from the years 1976 to 2006. Focusing on Douglas, AZ, Nogales, AZ, Calexico, CA and San Diego, CA, this study uses LODES WAC census block level data and a location quotient analysis to (1) determine if these three industries have continued to grow from 2004 to 2015 using summary statistics, still maps, and animated maps (2) determine if these shifts are related to US/MX border proximity using regression techniques. It was found that the location quotient for manufacturing decreased in all cities but San Diego, with location quotient values being strongly related to border proximity. Similarly, all cities but San Diego showed a decrease in retail trade location quotient, although this trend was not always related to border proximity. California border cities showed a decrease, but Arizona cities showed a continued increase in transport/warehousing location quotient with most cases related to border proximity. These results suggest that while spillover effects continue to exist in these US/MX city pairs, they are largely concentrated in the transport/warehousing sector, with the maturation and continued development of Mexican industrial cities likely leading to less manufacturing needs in US border cities across the study period.