Implications of transfer price policies on the Mexican maquiladora industry in the State of Baja California

The problem. The purpose of this study was to determine if a relationship exists between transfer price policies implemented by the government of the Republic of Mexico, and the level of investment in the Maquiladora industry in the State of Baja California, Mexico.; Method. A total of 62 Maquiladoras responded to a questionnaire regarding an increase in cost as a result of the implementation of transfer price regulations, likelihood of reduced foreign investment, and possibility of moving the Maquiladora operation out of Mexico.; Results. The data examined showed companies that reported less investment in Mexico also reported an increase in overall activity. Furthermore, 33% of respondents stated the overall cost of their operation in Mexico had not increased as a result of transfer price implementation.