A maquiladora (Spanish: [makilaˈðoɾa]), or maquila (IPA: [maˈkila]), is a company that allows factories to be largely duty free and tariff-free. These factories take raw materials and assemble, manufacture, or process them and export the finished product.

Why are maquiladoras important?

Maquiladoras create employment opportunities in border regions and help reduce Mexico’s unemployment rates. Exporting foreign products increases foreign exchange in Mexico, which is very beneficial and needed. The establishment of maquiladoras reduces the commercial deficit with the United States.

What is the purpose of maquiladoras quizlet?

A maquiladora is a foreign owned plant located in Mexico. they have an advantage of cheap labor, export assembled products to the United States by export, and an import of product components.

How do maquiladoras function?

Maquiladoras are often used to describe this specific type of manufacturing operation, but in Mexico, the term simply means “assembly plant.” The function of the assembly plant is to provide inexpensive labor to a manufacturing operation while simultaneously giving the business operation certain tax advantages.

What impact do maquiladoras have on a country?

The maquiladora industry has become an integral part of the eco- nomic and social structure of the entire United States-Mexico border. The diverse factories have brought industrialization to the region and have played a major role in fueling the population growth of com- munities along the border.

How have the maquiladoras benefited Mexico?

Simply put, maquiladoras benefit Mexico because they incentivize external investment by encouraging foreign investors and businesses—especially United States ones—to set up plants in Mexico.

Are maquiladoras ethical?

maquila employment is, at least in a limited sense, ethically defensible. employers to follow in developing countries. maquila employment from an ethical viewpoint and provide a linkage between the international business ethics literature and the current study.

What are maquiladoras in Mexico?

Maquiladoras (also known as “twin plants”) are manufacturing plants in Mexico with the parent company’s administration facility in the United States. Maquiladoras allow companies to capitalize on the less expensive labor force in Mexico and also receive the benefits of doing business in the United States.

Why is Mexico important in industrial organization?

c) Mexico has emerged as an important location in the current global system of industrial organization. One reason is the cheap labor found in Mexico. Another reason is the small amount of taxes and tariffs placed on imports and exports there. Also, there are not many environmental restrictions.

What trade agreement increased the growth of maquiladoras?

After Canada, Mexico and the United States adopted NAFTA in 1994, the growth of Mexican maquiladora plants soared.

What industries use maquiladoras?

Some of the top industries using maquiladoras include medical devices, consumer products, electronics, and the automotive sector. The industries are set up mostly in Rosarito, Tijuana, and Aguascalientes.

Who owns the maquiladoras in Mexico?

The vast majority of maquiladoras are owned and operated by Mexican, Asian, and American companies. Maquiladoras originated in Mexico in the 1960s, with many of the plants located in the border towns of northern Mexico.

Why do Mexicans work in maquiladoras?

Border cities and states tend to benefit the most from maquiladoras. Those in Mexico benefit from the creation of plants and facilities and a boost in labor and employment. American companies can benefit from cheaper labor costs, a reduction in production costs, import-export tariffs, and duties.

What are the problems of maquiladoras in Mexico?

Although maquiladoras create needed employment and income in Mexico, they also contribute to many infrastructure and waste pollution problems as well as disruption of traditional Mexican family structure and values systems.

What are the cons of maquiladoras?

CONS OF MAQUILADORAS

• Environmental negligence.
• False “paper” unions.
• Living wages near or at poverty level.
• Health risks.
• Unsafe working conditions.
• Poor labor protection laws.
• Sexual harassment.
• Inadequate housing for employees.

Why do Mexicans work in maquiladoras?

Border cities and states tend to benefit the most from maquiladoras. Those in Mexico benefit from the creation of plants and facilities and a boost in labor and employment. American companies can benefit from cheaper labor costs, a reduction in production costs, import-export tariffs, and duties.

What are some benefits to businesses offered by maquiladoras?

Maquiladora Benefits



Mexico’s lower labor costs reduce overall operating costs. Mexico’s geographic proximity to the US reduces shipping/freight costs and times, compared to offshoring. The company can scale or expand while staying competitive. Mexico’s free trade agreements can provide access to growing global markets.

What are the cons of maquiladoras?

CONS OF MAQUILADORAS

• Environmental negligence.
• False “paper” unions.
• Living wages near or at poverty level.
• Health risks.
• Unsafe working conditions.
• Poor labor protection laws.
• Sexual harassment.
• Inadequate housing for employees.

What is a maquiladora AP Human Geography?

Explanation: Maquiladoras are regions of northern Mexico where American companies conduct a great deal of their business, particularly manufacturing.

What industries use maquiladoras?

Some of the top industries using maquiladoras include medical devices, consumer products, electronics, and the automotive sector. The industries are set up mostly in Rosarito, Tijuana, and Aguascalientes.

Do maquiladoras represent exploitation or opportunity?

The reason maquiladoras have become the preferred model of exploitation used by the Global North stems from the sheer amount of surplus value able to be extracted from the workers.