Microenterprise Peso Acceptance in El Paso, Texas
| Autor | Michael J. Pisani - Thomas M. Fullerton, Jr. |
| Cargo | Central Michigan University - University of Texas at El Paso |
| Páginas | 75-94 |
Ensayos Revista de Economía–Volumen XXXII, No.2, noviembre 2013, pp. 75-94
Microenterprise Peso Acceptance in El Paso, Texas
Michael J. Pisani
Thomas M. Fullerton, Jr.
Fecha de recepción: 15/I/2013 Fecha de aceptación: 27/VI/2013
Abstract:
Utilizing a unique sample of 253 microenterprise border retailer s from El
Paso, Texas, this paper explores the p ossibility 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 a nd yet-
to-accept firms.
JEL Classification: M21, F31, D22.
Keywords: Microe nterprises; Currency Substitution; Reverse Dollarization,
Cross-Border Shoppers; El Paso, Texas.
Central Michigan University. Address: 204C Smith Hall, Central Michigan University,
Mt. Pleasant, MI 48859. Telephone: 989-774-1499, Email: m.pisani@cmich.edu
University of Texas at El Paso. Address: CBA 236, University of Texas at El Paso, El
Paso, TX 79968-0543. Telephone: 915-747-7747, Email: tomf@utep.edu
Acknowledgements: Partial financial support for this study was provided by Hunt
Communities, El Paso Water Utilities, Texas Department of Transportation, JPMorgan
Chase Bank of El Paso, the UTEP Center for the Study of Western Hemispheric Trade,
and a UTEP College of Business Administration Faculty Research Grant Fund. Helpful
comments and advice were provided by Angel Moli na and two anonymous referees.
Econometric research assistance was provided b y Carlos Lino, Sergio Contreras, Karen
Fierro, Azucena Gonzalez, Joseph Kababie, Raúl Muñoz, and Emmanuel Villalobos.
Ensayos Revista de Economía
76
Resumen
Mediante una muestra exclusiva de 253 micro-empresas dedicadas a las
ventas al por menor en El Pas o, Texas, este artículo explora la posibilidad de
que los compradores que cruzan la frontera para realizar compras paguen en
pesos mexicanos. Se encuentra que un quinto de las micro -empresas
dedicadas a las ventas en El Paso aceptan pagos en pesos mexicanos. El
incremento en la tasa de aceptación de pesos se asocia con la proximidad del
vendedor a México y al segmento del comercio en el cual los vendedores
compiten. Resulta más probable , que las micro-empresas de El Paso realicen
transacciones en pesos mexicanos que las empresas medianas y grandes
dedicadas al comercio al por menor. También se examina el costo de
oportunidad de la sustitución del tipo de cambio para las empresas que
aceptan y para las que todavía no aceptan el peso, como moneda de cambio.
Clasificación JEL: M21, F31, D22.
Palabras Clave: Las microempresas; sustitución de monedas, Dolarización
inversa; compradores transfronterizos, El Paso, Texas.
Introduction
The El Paso (Texas, U.S.) - Ciudad Juárez (Mexico) borderlands metrop lex
region is a busy place. On average, during the 2008 study time frame
utilized, 14,643 cars and 19,097 pedestrians would cross daily from Mexico
into the United States (Texas Center, 2012). W hile the international
boundary physically separates the two communities, cultural and commercial
links bind them together. Much of this nor thbound flow revolves around the
daily routines of life—sc hool attendance, work, entertainment, and
shopping—where Mexicans cross the border to augment consumer choices1
(Alegría, 2002; Ghaddar and Brown, 2005).
For example, it is common to see Mexican cross -border shoppers in a variety
of retail spaces throughout El Paso, including malls, grocery stores, and
gasoline stations. Less understood is the economic interaction and exchange
that takes place between Mexican shoppers and El Paso retailers. Generall y
at a more macro level, 2 U.S. border communities recognize the importance
of retail sales to Mexican shoppers3 (Ghaddar and Brown, 2005) and of the
1 There is also a robust s outhern flow of people and goods; however, this paper is f ocused
on cross-border Mexican shoppers.
2 The Dallas Federal Reserve Bank sponsored a conference in 2006 that centered on the
macro environment of cross-border retailing (Cañas, Coronado, and Phillips, 2006).
3 Ghaddar and Brown (2005, p. 49) estimate 12.7% of all retail sales in El Paso are
attributable to Mexican cross-border choppers.
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