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NAFTA and productivity convergence between Mexico and the US

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Author Info
Tadashi Ito () (IUHEI, The Graduate Institute of International Studies, Geneva)
Abstract

This paper studies whether NAFTA contributed to the productivity convergence between Mexico and the US. Using data from the manufacturing sector for 1986 to 2000 and introducing a number of refinements in the computation of the total factor productivity and estimation methods, it shows that the productivity gap increased and converged to a higher gap level. Moreover, it finds no clear evidence for NAFTA’s contribution to the TFP convergence. These findings are in a sharp contrast with that of the previous literature. The paper also finds that under NAFTA the industries which have smaller initial productivity gap experienced less increasing productivity gap than the industries which have larger initial productivity gap.

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Publisher Info
Paper provided by Economics Section, The Graduate Institute of International Studies in its series HEI Working Papers with number 26-2007.

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Length: 28
Date of creation: 11 Oct 2007
Date of revision: 09 Jun 2009
Handle: RePEc:gii:giihei:heiwp27-2007

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Keywords: NAFTA; Productivity;

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Find related papers by JEL classification:
F15 - International Economics - - Trade - - - Economic Integration
F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies

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