Market Line: Business and Economic News From Indiana University.

(From AScribe)

BLOOMINGTON, Ind. -- With this edition, Indiana University reintroduces "Market Line," a regular feature that will highlight expertise and research at Indiana University on business and economic issues. Contact information for expert sources is included. If you would like photos or further information on any of these story ideas, contact George Vlahakis of IU Media Relations at 812-855-0846 or gvlahaki@indiana.edu.

- - - -

NAFTA: BORDER STATES

Under NAFTA, one would expect that border states would develop closer trade ties with neighboring Canada and Mexico, but this simply has not been the case, according to Lawrence S. Davidson, professor of business economics and public policy in IU's Kelley School of Business. In a 2003 study, Davidson found that northern border states were selling more goods to Mexico, while states to the south increased sales to Canada. "This crisscross pattern implies that factors other than distance were determining trade patterns in North America," Davidson wrote in a chapter for the book, Transatlantic Perspectives (Lit Verlag, Germany; 2004). In his new research, Davidson factored in trade with 15 European Union countries and concluded, "Whether they were becoming more or less similar, the result was the same -- global factors were causing industry responses that had little to do with distance and everything to do with industry factors ... Industry-specific factors should not be minimized with respect to where trade takes place." Policymakers interested in understanding and promoting export activities need to …