IDEAS home Printed from https://ideas.repec.org/a/eee/ecofin/v34y2015icp351-363.html
   My bibliography  Save this article

Measuring the impact of the Chinese competition on the Mexican Labor Market: 1990–2013

Author

Listed:
  • Caamal-Olvera, Cinthya G.
  • Rangel-González, Erick

Abstract

The purpose of this paper is to analyze the effects that the Chinese competition has had on the Mexican labor market considering that both countries offer abundant low-skill workers and that China is one of the largest export countries, which directly competes with Mexico in the manufacturing industry. Particularly, panel data is used to estimate a dynamic labor demand and a dynamic wage equation to measure direct and indirect effects of the Chinese competition over these two variables. A negative direct impact was found, due to the Chinese imports into Mexico, affecting employment, and on a smaller scale affecting wages. Evidence was not found recording an indirect impact (via the US market) neither on employment nor on wages. Finally, our results indicate that increases in the share of imports of the United States from Mexico are associated with increases in employment in Mexico but not with wages.

Suggested Citation

  • Caamal-Olvera, Cinthya G. & Rangel-González, Erick, 2015. "Measuring the impact of the Chinese competition on the Mexican Labor Market: 1990–2013," The North American Journal of Economics and Finance, Elsevier, vol. 34(C), pages 351-363.
    • Handle: RePEc:eee:ecofin:v:34:y:2015:i:c:p:351-363
    DOI: 10.1016/j.najef.2015.09.004
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1062940815000741
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.najef.2015.09.004?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. David H. Autor & David Dorn & Gordon H. Hanson, 2013. "The China Syndrome: Local Labor Market Effects of Import Competition in the United States," American Economic Review, American Economic Association, vol. 103(6), pages 2121-2168, October.
    2. Raymundo M. Campos Vazquez & Nora Lustig & Alma S. Santillán, 2014. "A methodological note on the measurement of labor income in Mexico," Estudios Económicos, El Colegio de México, Centro de Estudios Económicos, vol. 29(1), pages 107-123.
    3. Kuwayama, Mikio & Rosales V., Osvaldo, 2012. "China and Latin America and the Caribbean: building a strategic economic and trade relationship," Libros de la CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 2599 edited by Eclac.
    4. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
    5. Jenkins, Rhys & Peters, Enrique Dussel & Moreira, Mauricio Mesquita, 2008. "The Impact of China on Latin America and the Caribbean," World Development, Elsevier, vol. 36(2), pages 235-253, February.
    6. Sargent, John & Matthews, Linda, 2009. "China versus Mexico in the Global EPZ Industry: Maquiladoras, FDI Quality, and Plant Mortality," World Development, Elsevier, vol. 37(6), pages 1069-1082, June.
    7. Iacovone, Leonardo & Rauch, Ferdinand & Winters, L. Alan, 2013. "Trade as an engine of creative destruction: Mexican experience with Chinese competition," Journal of International Economics, Elsevier, vol. 89(2), pages 379-392.
    8. Layard, Richard & Nickell, Stephen, 1986. "Unemployment in Britain," Economica, London School of Economics and Political Science, vol. 53(210(S)), pages 121-169, Supplemen.
    9. Bhattarai, Keshab & Mallick, Sushanta, 2013. "Impact of China's currency valuation and labour cost on the US in a trade and exchange rate model," The North American Journal of Economics and Finance, Elsevier, vol. 25(C), pages 40-59.
    10. Utar, Hale & Ruiz, Luis B. Torres, 2013. "International competition and industrial evolution: Evidence from the impact of Chinese competition on Mexican maquiladoras," Journal of Development Economics, Elsevier, vol. 105(C), pages 267-287.
    11. Chiquiar, Daniel & Ramos-Francia, Manuel, 2005. "Trade and business-cycle synchronization: evidence from Mexican and U.S. manufacturing industries," The North American Journal of Economics and Finance, Elsevier, vol. 16(2), pages 187-216, August.
    12. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(2), pages 277-297.
    13. Caamal Olvera, Cinthya G., 2013. "Effects of manufacturing dynamics on returns to education in the North of Mexico," MPRA Paper 55211, University Library of Munich, Germany.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Liliana Meza-González & Jaime Marie Sepulveda, 2019. "The impact of competition with China in the US market on innovation in Mexican manufacturing firms," Latin American Economic Review, Springer;Centro de Investigaciòn y Docencia Económica (CIDE), vol. 28(1), pages 1-21, December.
    2. Alexandra Sotiriou & Andrés Rodríguez-Pose, 2021. "Chinese vs. US Trade in an Emerging Country: The Impact of Trade Openness in Chile," Journal of Development Studies, Taylor & Francis Journals, vol. 57(12), pages 2095-2111, December.
    3. Juan Blyde & Matias Busso & Kyunglin Park & Dario Romero, 2023. "Short‐ and long‐run labor market adjustment to import competition," Review of International Economics, Wiley Blackwell, vol. 31(4), pages 1552-1569, September.
    4. Fina Sri Agustina, 2018. "Import competition and local labor markets: the case of Indonesia," Economic Journal of Emerging Markets, Universitas Islam Indonesia, vol. 10(2), pages 177-186, Oktober.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Alexandra Sotiriou & Andrés Rodríguez-Pose, 2021. "Chinese vs. US Trade in an Emerging Country: The Impact of Trade Openness in Chile," Journal of Development Studies, Taylor & Francis Journals, vol. 57(12), pages 2095-2111, December.
    2. Barbara Kotschwar, 2014. "China's Economic Influence in Latin America," Asian Economic Policy Review, Japan Center for Economic Research, vol. 9(2), pages 202-222, July.
    3. Sylviane Guillaumont Jeanneney and Ping Hua, 2020. "When and How African Real Exchange Rates Relative to China Affect its Manufacturing?," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 45(4), pages 1-34, December.
    4. Yane, Haruka & Yamada, Hiroyuki, 2015. "Import Competition from Neighbors: Impacts on Performances of Enterprises in Vietnam," Conference papers 332621, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    5. Fernández Guerrico, Sofía, 2021. "The effects of trade-induced worker displacement on health and mortality in Mexico," Journal of Health Economics, Elsevier, vol. 80(C).
    6. Sudeshna Ghosh & Buhari Doğan & Muhlis Can & Muhammad Ibrahim Shah & Nicholas Apergis, 2023. "Does economic structure matter for income inequality?," Quality & Quantity: International Journal of Methodology, Springer, vol. 57(3), pages 2507-2527, June.
    7. Alfonso Arpaia & Giuseppe Carone, 2004. "Do labour taxes (and their composition) affect wages in the short and in the long run?," Public Economics 0411004, University Library of Munich, Germany.
    8. Davide Consoli & Francesco Vona & Francesco Rentocchini, 2016. "That was then, this is now: skills and routinization in the 2000s," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 25(5), pages 847-866.
    9. William F. Lincoln & Andrew H. McCallum & Michael Siemer, 2017. "The Great Recession and a Missing Generation of Exporters," Finance and Economics Discussion Series 2017-108, Board of Governors of the Federal Reserve System (U.S.).
    10. repec:hal:spmain:info:hdl:2441/2ajduu0gqt9ho8h2tavbin6ops is not listed on IDEAS
    11. David H. Autor & David Dorn & Gordon H. Hanson, 2016. "The China Shock: Learning from Labor-Market Adjustment to Large Changes in Trade," Annual Review of Economics, Annual Reviews, vol. 8(1), pages 205-240, October.
    12. Benedikt Heid & Raúl Mínguez & Asier Minondo, 2021. "Is competition from China so special?," The World Economy, Wiley Blackwell, vol. 44(1), pages 64-88, January.
    13. Koijen, Ralph & Gabaix, Xavier, 2020. "Granular Instrumental Variables," CEPR Discussion Papers 15531, C.E.P.R. Discussion Papers.
    14. William Lincoln & Andrew McCallum & Michael Siemer, 2018. "The Great Recession and a Missing Generation of Exporters," 2018 Meeting Papers 558, Society for Economic Dynamics.
    15. De Lyon, Josh & Pessoa, Joao Paulo, 2021. "Worker and firm responses to trade shocks: The UK-China case," European Economic Review, Elsevier, vol. 133(C).
    16. Reinhard Hujer & Uwe Blien & Marco Caliendo & Christopher Zeiss, 2006. "Macroeconometric Evaluation of Active Labour Market Policies in Germany. A Dynamic Panel Approach Using Regional Data," AIEL Series in Labour Economics, in: Floro Ernesto Caroleo & Sergio Destefanis (ed.), The European Labour Market. Regional Dimensions, edition 1, chapter 14, pages 287-309, AIEL - Associazione Italiana Economisti del Lavoro.
    17. Sónia Cabral & Pedro S. Martins & João Pereira dos Santos & Mariana Tavares, 2021. "Collateral Damage? Labour Market Effects of Competing with China—at Home and Abroad," Economica, London School of Economics and Political Science, vol. 88(350), pages 570-600, April.
    18. Chakraborty, Pavel & Henry, Michael, 2019. "Chinese competition and product variety of Indian firms," Journal of Comparative Economics, Elsevier, vol. 47(2), pages 367-395.
    19. Sonia A. Agudelo & Hector Sala, 2016. "Wage setting in the Colombian manufacturing industry," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 24(1), pages 99-134, January.
    20. Takashi Kamihigashi & Yosuke Sasaki, 2022. "The Impact of Multi-Factor Productivity on Income Inequality," Discussion Paper Series DP2022-31, Research Institute for Economics & Business Administration, Kobe University.
    21. Guido Matias Cortes & Diego M. Morris, 2019. "Are Routine Jobs Moving South? Evidence from Changes in the Occupational Structure of Employment in the U.S. and Mexico," Working Paper series 19-15, Rimini Centre for Economic Analysis.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecofin:v:34:y:2015:i:c:p:351-363. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/620163 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.