Combining the NEG and standard trade theory, we get the following hypotheses:
H1: Following Krugman & Lizas-Elizondo, trade will decrease agglomeration
H1a: Alternatively, following Paluzie, Monfort & Nicolini, trade will increase agglomeration
H2: Due to transportation costs, the benefits of trade will be greater in those regions closer to the
border
H3: Those regions with an abundance of low-skilled labor will benefit
H4: Traded sectors will be more influenced by NAFTA and distance to the U.S. market than
non-traded sector