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NAFTA and Manufacturing Productivity in Mexico

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  • Ernesto López-Córdova

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Abstract

Using a panel of Mexican manufacturing plants over the period 1993-1999, I estimate total factor productivity (TFP) at the plant level and study its evolution in the face of trade and investment liberalization under the North American Free Trade Agreement. I implement the Olley-Pakes (1996) algorithm on the data to correct for simultaneity and sample selection problems a¤ecting OLS estimates. I then relate the evolution of TFP over the period to tariff levels in Mexico and the United States, import penetration, exporting activities, imported inputs use and foreign capital participation. I ...nd that increased import competition and access to the U.S. market have had a positive impact on TFP. Foreign capital also has had a positive impact on TFP, but intra-industry spillovers are negative. Last, there is no clear evidence regarding the impact from the use of imported inputs or from exporting operations.

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Bibliographic Info

Article provided by LACEA - LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION in its journal JOURNAL OF LACEA ECONOMIA.

Volume (Year): (2003)
Issue (Month): ()
Pages:

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Handle: RePEc:col:000425:008679

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Related research

Keywords: "NAFTA; trade liberalization; manufacturing; productivity; foreign directinvestment";

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Cited by:
  1. François Bourguignon & Maurizio Bussolo & Luiz A. Pereira da Silva, 2008. "The Impact of Macroeconomic Policies on Poverty and Income Distribution : Macro-Micro Evaluation Techniques and Tools," World Bank Publications, The World Bank, number 6586, October.
  2. Kosteas, Vasilios D., 2008. "Trade Protection and Capital Imports in the Mexican Manufacturing Sector," World Development, Elsevier, vol. 36(12), pages 2822-2837, December.
  3. Haltiwanger, John & Kugler, Adriana & Kugler, Maurice & Micco, Alejandro & Pagés, Carmen, 2004. "Effects of tariffs and real exchange rates on job reallocation: evidence from Latin America," Discussion Paper Series In Economics And Econometrics 0410, Economics Division, School of Social Sciences, University of Southampton.
  4. Juan Carlos Chávez & Felipe J. Fonseca, 2012. "Technical and Structural Efficiency in Mexican Manufacturing: A Regional Approach," Working Papers 2012-03, Banco de México.
  5. De Hoyos, Rafael E. & Iacovone, Leonardo, 2011. "Economic performance under NAFTA : a firm-level analysis of the trade-productivity linkages," Policy Research Working Paper Series 5661, The World Bank.
  6. Iacovone, Leonardo, 2009. "The better you are the stronger it makes you : evidence on the asymmetric impact of liberalization," Policy Research Working Paper Series 4930, The World Bank.
  7. Octavio Escobar, 2011. "The location pattern of FDI in Mexico after NAFTA," ERSA conference papers ersa10p804, European Regional Science Association.
  8. Carlos Felipe Jaramillo & Daniel Lederman & Maurizio Bussolo & David Gould & Andrew Mason, 2006. "Challenges of CAFTA : Maximizing the Benefits for Central America," World Bank Publications, The World Bank, number 7127, October.
  9. Orlando Gracia & Hernando Zuleta, 2005. "The Free Trade Agreement between Colombia and USA: What can happen to Colombia?," DEGIT Conference Papers c010_023, DEGIT, Dynamics, Economic Growth, and International Trade.

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