Abstract
Utilizing a unique sample of 253 microenterprise border retailers from El Paso, Texas, this paper explores the possibility of cash payment from cross-border shoppers using Mexican pesos. We find that one-fifth of microenterprise retailers in El Paso accept payment in Mexican pesos. Increased peso acceptance rates are associated with retailer proximity to Mexico and business segment in which the retailers compete. El Paso microenterprises are also more likely than their medium- to large-business counterparts to allow payments to be made using Mexican pesos. The opportunity cost of currency substitution is examined for accepting and yet-to-accept firms. JEL Classification: M21, F31, D22.
Publisher
Universidad Autonoma de Nuevo Leon
Reference42 articles.
1. Alami, T. H. (2001). “Currency substitution versus dollarization: A portfolio balance model”. Journal of Policy Modeling, 21, 473-479.
2. Alegría, T. (2002). “Demand and supply of Mexican cross-border workers”. Journal of Borderlands Studies, 17, 37-55.
3. Blanco-Gonzalez, L. and Fullerton, T. M. Jr. (2006). “Borderplex menu evidence for the law of one price”. Economic Letters, 90, 28-33.
4. Brand, D. (1993). Currency substitution in developing countries: Theory and empirical analysis for Latin America and Eastern Europe. Munich: Weltform Verlag.
5. Brislin, R. W. (1980). Translation and content analysis of oral and written materials. In H.C. Triandis and W. W. Lambert (Eds.), Handbook of cross cultural psychology, 398-444.