ASSESSING THE IMPACT OF THE MAQUILADORA INDUSTRY IN MEXICO: AN INTERINDUSTRY ANALYSIS

Abstract

Maquiladora industries, composed of assembly plants, play a central role in Mexico's development strategy. The author establishes that current low usage of domestic inputs by the maquiladora industries prevents Mexico from enginning the rest of the economy through secondary impacts to expand the national market. Furthermore, the economy is also affected, through diminished domestic linkages, from increasing the value added in Mexico and tax collection. An interindustry input‐output model for the Mexican economy with emphasis on the maquiladora industries was developed. Among the findings, it is stressed that input purchases linkages are more effective than worker spending as a way to generate secondary output, income and jobs. This implies that increasing domestic input purchases by maquiladora industries could represent important potential advantages for the Mexican economy.