IDEAS home Printed from https://ideas.repec.org/a/jed/journl/v30y2005i2p155-176.html
   My bibliography  Save this article

Nafta¡¯S Impact On The Mexican Automotive Sector

Author

Listed:
  • Lila J. Truett

    (Division of Economics and Finance, The University of Texas at San Antonio)

  • Dale B. Truett

    (Division of Economics and Finance, The University of Texas at San Antonio)

Abstract

The findings discussed here are the outcome of continuing research on the Mexican automotive industry and include data for several years during which the NAFTA was in effect. Key results include strong evidence of constant returns to scale in both the automotive industry as a whole as well as the vehicle assembly industry and a finding that the period after NAFTA was implemented has been associated with lower production costs. In addition, these data support the conclusion that capital, labor, and foreign intermediate goods are all substitutes for one another, as are capital and domestic intermediate goods, but that labor and domestic intermediate goods are complements. While evidence was found to suggest some increased responsiveness in domestic markets to both foreign and domestic input prices, other results give reason for concern about continuing market impediments in Mexico.

Suggested Citation

  • Lila J. Truett & Dale B. Truett, 2005. "Nafta¡¯S Impact On The Mexican Automotive Sector," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 30(2), pages 155-176, December.
    • Handle: RePEc:jed:journl:v:30:y:2005:i:2:p:155-176
    as

    Download full text from publisher

    File URL: http://www.jed.or.kr/full-text/30-2/J08_709.PDF
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Christensen, Laurits R & Jorgenson, Dale W & Lau, Lawrence J, 1973. "Transcendental Logarithmic Production Frontiers," The Review of Economics and Statistics, MIT Press, vol. 55(1), pages 28-45, February.
    2. BARTEN, Anton P., 1969. "Maximum likelihood estimation of a complete system of demand equations," LIDAM Reprints CORE 34, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    3. Barten, A. P., 1969. "Maximum likelihood estimation of a complete system of demand equations," European Economic Review, Elsevier, vol. 1(1), pages 7-73.
    4. Tybout, James & de Melo, Jamie & Corbo, Vittorio, 1991. "The effects of trade reforms on scale and technical efficiency : New evidence from Chile," Journal of International Economics, Elsevier, vol. 31(3-4), pages 231-250, November.
    5. Fuss,Melvyn A. & Waverman,Leonard, 2006. "Costs and Productivity in Automobile Production," Cambridge Books, Cambridge University Press, number 9780521031752.
    6. Tybout, James R. & Westbrook, M. Daniel, 1995. "Trade liberalization and the dimensions of efficiency change in Mexican manufacturing industries," Journal of International Economics, Elsevier, vol. 39(1-2), pages 53-78, August.
    7. Caves, Douglas W & Christensen, Laurits R & Tretheway, Michael W, 1980. "Flexible Cost Functions for Multiproduct Firms," The Review of Economics and Statistics, MIT Press, vol. 62(3), pages 477-481, August.
    8. Burgess, David F., 1975. "Duality theory and pitfalls in the specification of technologies," Journal of Econometrics, Elsevier, vol. 3(2), pages 105-121, May.
    9. Wales, Terence J., 1977. "On the flexibility of flexible functional forms : An empirical approach," Journal of Econometrics, Elsevier, vol. 5(2), pages 183-193, March.
    10. Kerkvliet, Joe & McMullen, B Starr, 1997. "The Impact of Unionization on Motor Carrier Costs," Economic Inquiry, Western Economic Association International, vol. 35(2), pages 271-284, April.
    11. Westbrook, M Daniel & Tybout, James R, 1993. "Estimating Returns to Scale with Large, Imperfect Panels: An Application to Chilean Manufacturing Industries," The World Bank Economic Review, World Bank, vol. 7(1), pages 85-112, January.
    12. Caves, Douglas W & Christensen, Laurits R, 1980. "Global Properties of Flexible Functional Forms," American Economic Review, American Economic Association, vol. 70(3), pages 422-432, June.
    13. Ernst R. Berndt & Laurits R. Christensen, 1973. "The Internal Structure of Functional Relationships: Separability, Substitution, and Aggregation," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 40(3), pages 403-410.
    14. Eakin, B Kelly & McMillen, Daniel P & Buono, Mark J, 1990. "Constructing Confidence Intervals Using the Bootstrap: An Application to a Multi-Product Cost Function," The Review of Economics and Statistics, MIT Press, vol. 72(2), pages 339-344, May.
    Full references (including those not matched with items on IDEAS)

    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. Lila J. Truett & Dale B. Truett, 2003. "The Italian Automotive Industry and Economies of Scale," Contemporary Economic Policy, Western Economic Association International, vol. 21(3), pages 329-337, July.
    2. Truett, Lila J. & Truett, Dale B., 2003. "A cost function analysis of import demand and growth in South Africa," Journal of Development Economics, Elsevier, vol. 70(2), pages 425-442, April.
    3. Lila J. Truett & Dale B. Truett, 2011. "Whither Germany and the EMU In a Challenging Environment?," Working Papers 0019, College of Business, University of Texas at San Antonio.
    4. Lila Truett & Dale Truett, 2006. "Production and costs in the South African motor vehicle industry," Applied Economics, Taylor & Francis Journals, vol. 38(20), pages 2381-2392.
    5. Truett, Lila J. & Truett, Dale B., 2002. "The demand for imports in Italy: A production analysis," International Review of Economics & Finance, Elsevier, vol. 11(4), pages 393-409.
    6. Truett, Lila J. & Truett, Dale B., 2007. "A cost-based analysis of scale economies in the French auto industry," International Review of Economics & Finance, Elsevier, vol. 16(3), pages 369-382.
    7. Lila J. Truett & Dale B. Truett, 2009. "Challenges For France In The Emerging International Environment: A Dynamic Analysis," Contemporary Economic Policy, Western Economic Association International, vol. 27(4), pages 566-573, October.
    8. Lila J. Truett & Dale Truett, 2009. "A Bacon of Hope? Another Look at the Italian Textile Industry," Working Papers 0060, College of Business, University of Texas at San Antonio.
    9. Lila J. Truett & Dale B. Truett, 2005. "European Integration and Production in the French Economy," Contemporary Economic Policy, Western Economic Association International, vol. 23(2), pages 304-316, April.
    10. Lila J. Truett & Dale B. Truett, 2008. "The South African Textile Industry: Challenges and Opportunities," Working Papers 0044, College of Business, University of Texas at San Antonio.
    11. Lila J. Truett, 2010. "The Korean Textile Industry: Still Competitive, After All These Years?," Working Papers 0004, College of Business, University of Texas at San Antonio.
    12. Truett, Lila J. & Truett, Dale B., 2014. "The South Korean auto industry's path to maturity," International Review of Economics & Finance, Elsevier, vol. 31(C), pages 86-94.
    13. Lila J. Truett, 2010. "The Korean Textile Industry: Still Competitive, After All These Years?," Working Papers 0004, College of Business, University of Texas at San Antonio.
    14. Truett, Lila J. & Truett, Dale B., 1997. "The Korean metals industry and economic development," Journal of Asian Economics, Elsevier, vol. 8(2), pages 333-347.
    15. Truett, Lila J. & Truett, Dale B., 2010. "Globalization challenges for the Mexican textile industry," International Review of Economics & Finance, Elsevier, vol. 19(4), pages 733-741, October.
    16. Truett, Dale B. & Truett, Lila J., 1996. "Trade liberalization and the Mexican steel industry," International Review of Economics & Finance, Elsevier, vol. 5(4), pages 429-447.
    17. Dale Truett & Lila Truett, 1998. "Scale properties and input substitution in mexican electrical equipment manufacturing," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 4(1), pages 70-82, February.
    18. Yan Dong & Yuliang Yao & Kefeng Xu, 2008. "Designing Supply Chain Backorder Contracts for Customer Retention," Working Papers 0038, College of Business, University of Texas at San Antonio.
    19. Truett, Lila J. & Truett, Dale B., 1998. "The demand for imports in Korea: a production analysis approach," Journal of Development Economics, Elsevier, vol. 56(1), pages 97-114, June.
    20. Lila J. Truett & Dale B. Truett, 2011. "The South Korean Auto Industry: All Grown Up Now? Since 1962, South Korea has recognized the motor vehicle industry as a critical industry for economic development. The government has been closely inv," Working Papers 0011, College of Business, University of Texas at San Antonio.

    More about this item

    Keywords

    Mexico; Automotive Industry; NAFTA;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

    Statistics

    Access and download statistics

    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:jed:journl:v:30:y:2005:i:2:p:155-176. 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: Sung Y. Park (email available below). General contact details of provider: https://edirc.repec.org/data/eccaukr.html .

    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.