Trade Cluster Impacts on USA Southern Border Transportation Costs

Panel regression analysis is used to examine the impact of trade clusters on transportation costs along the southern border of the United States. CIF/FOB ratios are utilized as the transportation cost measures. Grubel-Lloyd and Herfindahl-Hirschman indexes are utilized to identify trade clusters in the sample. Data are assembled for four customs districts (El Paso, Laredo, Nogales, and San Diego) during a 20-year period between 1995 and 2015. Empirical results suggest that trade clusters are associated with reduced transportation costs. These results differ from those of the northern border of the United States, where trade clusters have higher transportation costs.