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Is Mexico a Lumpy Country?

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  • Andrew B. Bernard
  • Raymond Robertson
  • Peter K. Schott

Abstract

Courant and Deardorff (1992 ) show theoretically that an extremely uneven distribution of factors within a country can induce behavior at odds with overall comparative advantage. We demonstrate the importance of this insight for developing countries. We show that Mexican regions exhibit substantial variation in skill abundance, offer significantly different relative factor rewards, and produce disjoint sets of industries. This heterogeneity helps both to undermine Mexico's aggregate labor abundance and to motivate behavior that is more consistent with relative skill abundance. Copyright � 2010 Blackwell Publishing Ltd.

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Bibliographic Info

Article provided by Wiley Blackwell in its journal Review of International Economics.

Volume (Year): 18 (2010)
Issue (Month): 5 (November)
Pages: 937-950

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Handle: RePEc:bla:reviec:v:18:y:2010:i:5:p:937-950

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  1. Andrew B. Bernard & Stephen Redding & Peter K. Schott, 2005. "Factor Price Equality and the Economies of the United States," CEP Discussion Papers, Centre for Economic Performance, LSE dp0696, Centre for Economic Performance, LSE.
  2. Gordon H. Hanson, 2003. "What Has Happened to Wages in Mexico since NAFTA?," NBER Working Papers 9563, National Bureau of Economic Research, Inc.
  3. Hanson, G.H. & Harrison, A., 1995. "Trade, Technology and Wage Inequality," Papers, Columbia - Graduate School of Business 95-20, Columbia - Graduate School of Business.
  4. Cragg, Michael Ian & Epelbaum, Mario, 1996. "Why has wage dispersion grown in Mexico? Is it the incidence of reforms or the growing demand for skills?," Journal of Development Economics, Elsevier, Elsevier, vol. 51(1), pages 99-116, October.
  5. Davis, D.R. & Weinstein, D.E., 1999. "An Account of Global Factor Trade," Working Papers, Research Seminar in International Economics, University of Michigan 435, Research Seminar in International Economics, University of Michigan.
  6. Peter K. Schott, 2001. "One Size Fits All? Heckscher-Ohlin Specialization in Global Production," NBER Working Papers 8244, National Bureau of Economic Research, Inc.
  7. Deardorff, A.V., 1991. "The Possibility of Factor Price Equalization, Revisited," Working Papers, Research Seminar in International Economics, University of Michigan 277, Research Seminar in International Economics, University of Michigan.
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  9. Lucinda Vargas, 1999. "The binational importance of the maquiladora industry," Southwest Economy, Federal Reserve Bank of Dallas, Federal Reserve Bank of Dallas, issue Nov, pages 1-5.
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  14. Verhoogen, Eric, 2007. "Trade, Quality Upgrading and Wage Inequality in the Mexican Manufacturing Sector," IZA Discussion Papers 2913, Institute for the Study of Labor (IZA).
  15. Raymond Robertson, 2000. "Trade Liberalisation and Wage Inequality: Lessons from the Mexican Experience," The World Economy, Wiley Blackwell, Wiley Blackwell, vol. 23(6), pages 827-849, 06.
  16. Esquivel, Gerardo & Rodriguez-Lopez, Jose Antonio, 2003. "Technology, trade, and wage inequality in Mexico before and after NAFTA," Journal of Development Economics, Elsevier, Elsevier, vol. 72(2), pages 543-565, December.
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Citations

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Cited by:
  1. David Atkin, 2012. "Endogenous Skill Acquisition and Export Manufacturing in Mexico," NBER Working Papers 18266, National Bureau of Economic Research, Inc.
  2. Steven Brakman & Charles van Marrewijk, 2011. "Lumpy Countries, Urbanization, and Trade," CESifo Working Paper Series 3669, CESifo Group Munich.
  3. Andreas Waldkirch, 2010. "The Effects of Foreign Direct Investment in Mexico since NAFTA," The World Economy, Wiley Blackwell, Wiley Blackwell, vol. 33(5), pages 710-745, 05.
  4. Kaplan, David S. & Lederman, Daniel & Robertson, Raymond, 2012. "What drives short-run labor market volatility in offshoring industries ? evidence from northern Mexico during 2007-2009," Policy Research Working Paper Series 6268, The World Bank.
  5. Rossi-Hansberg, Esteban & Garicano, Luis & Antras, Pol, 2006. "Offshoring in a Knowledge Economy," Scholarly Articles 3196323, Harvard University Department of Economics.
  6. Charles Van Marrewijk & Steven Brakman, 2011. "Missing trade and lumpy countries," ERSA conference papers ersa10p610, European Regional Science Association.

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