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Trade Liberalization and Location: Empirical Evidence for Mexican Manufacturing Industries

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Author Info

  • Jordaan, Jacob A.

    (Free U Amsterdam)

  • Sanchez-Reaza, Javier

    (CIDE, Mexico City)

Abstract

In this paper, we provide evidence based on New Economic Geography Models and estimate the statistical effects of second nature advantages to shed some light on the locational transformation of the manufacturing sector in Mexico. Changes in regional industry shares and regional wages during trade liberalization show that the border states have gained at the expense of the old manufacturing belt in Mexico City. Furthermore, the statistical evidence indicates that that the relevant market has shifted from Mexico City to the USA. However, the relation between trade liberalization and industry location is subject to a considerable level of industry heterogeneity, suggesting the co-existence of processes of regional convergence and divergence.

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Bibliographic Info

Article provided by Southern Regional Science Association in its journal Review of Regional Studies.

Volume (Year): 36 (2006)
Issue (Month): 3 ()
Pages: 279-303

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Handle: RePEc:rre:publsh:v:36:y:2006:i:3:p:279-303

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Related research

Keywords: Economic Geography; Geography; Manufacturing; Regional; Trade;

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Cited by:
  1. Jacob A. Jordaan, 2012. "Agglomeration and the location choice of foreign direct investment: new evidence from manufacturing FDI in Mexico," Estudios Económicos, El Colegio de México, Centro de Estudios Económicos, vol. 27(1), pages 61-97.
  2. Jordaan, Jacob A., 2011. "FDI, Local Sourcing, and Supportive Linkages with Domestic Suppliers: The Case of Monterrey, Mexico," World Development, Elsevier, vol. 39(4), pages 620-632, April.
  3. Jordaan, Jacob A., 2008. "Intra- and Inter-industry Externalities from Foreign Direct Investment in the Mexican Manufacturing Sector: New Evidence from Mexican Regions," World Development, Elsevier, vol. 36(12), pages 2838-2854, December.
  4. Jacob Jordaan & Eduardo Rodriguez-Oreggia, 2012. "Regional growth in Mexico under trade liberalisation: how important are agglomeration and FDI?," The Annals of Regional Science, Springer, vol. 48(1), pages 179-202, February.

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