A cost function analysis of the Mexican nonelectrical machinery industry
AbstractThis paper investigates the existence of economies of scale in the Mexican nonelectrical machinery industry as well as the direct and cross price elasticities of demand for its inputs (capital, labour, and intermediate goods) by estimating a translog cost function. There is evidence that the industry exhibits economies of scale but that technological change has not significantly affected cost. Direct demand elasticities for the inputs are negative and less than one, but capital displays a higher price elasticity of demand than does labour or intermediate goods. In general, the input cross price elasticities indicate that they are substitutes. The results suggest that in the early years of the North American Free Trade Agreement, expansion of the industry may increase its competitiveness and generate some employment. The best near-term prospects for growth in the industry appear to be through foreign investment or joint ventures oriented toward both exports and the procurement activities of government and government-related entities in Mexico.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal Applied Economics.
Volume (Year): 30 (1998)
Issue (Month): 8 ()
Contact details of provider:
Web page: http://www.tandfonline.com/RAEC20
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Klueh, Ulrich H. & Pastor, Gonzalo & Segura, Alonso, 2009. "Policies to improve the local impact from hydrocarbon extraction: Observations on West Africa and possible lessons for Central Asia," Energy Policy, Elsevier, vol. 37(3), pages 1128-1144, March.
- Fullerton, Thomas M., Jr. & Sawyer, W. Charles & Sprinkle, Richard L., 2010.
"Intra-industry trade in Latin America and the Caribbean,"
34854, University Library of Munich, Germany, revised 2011.
- Thomas Fullerton & W. Charles Sawyer & Richard Sprinkle, 2011. "Intra-Industry Trade in Latin America and the Caribbean," Working Papers 201103, Texas Christian University, Department of Economics.
- Héctor Salgado Banda & Lorenzo E. Bernal Verdugo, 2007. "Translog Cost Functions: An Application for Mexican Manufacturing," Working Papers 2007-08, Banco de México.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty).
If references are entirely missing, you can add them using this form.