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Nafta¡¯S Impact On The Mexican Automotive Sector

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  • 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)

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    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.

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    File URL: http://www.jed.or.kr/full-text/30-2/J08_709.PDF
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    Bibliographic Info

    Article provided by Chung-Ang Unviersity, Department of Economics in its journal Journal Of Economic Development.

    Volume (Year): 30 (2005)
    Issue (Month): 2 (December)
    Pages: 155-176

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    Handle: RePEc:jed:journl:v:30:y:2005:i:2:p:155-176

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    Web page: http://www.jed.or.kr/
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    Related research

    Keywords: Mexico; Automotive Industry; NAFTA;

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    1. 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.
    2. Barten, A. P., 1969. "Maximum likelihood estimation of a complete system of demand equations," European Economic Review, Elsevier, vol. 1(1), pages 7-73.
    3. Burgess, David F., 1975. "Duality theory and pitfalls in the specification of technologies," Journal of Econometrics, Elsevier, vol. 3(2), pages 105-121, May.
    4. 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 339-44, May.
    5. Fuss,Melvyn A. & Waverman,Leonard, 1992. "Costs and Productivity in Automobile Production," Cambridge Books, Cambridge University Press, number 9780521341417, October.
    6. Godfrey,L. G., 1991. "Misspecification Tests in Econometrics," Cambridge Books, Cambridge University Press, number 9780521424592, October.
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