This paper analyzes the performance of Mexican manufacturing firms following trade liberalization within a very specific institutional setting: The North American Free-Trade Agreement (NAFTA). We compare plants' productivity growth and patterns of job creation and destruction across their relative degree of integration into foreign product markets, their access to technology, and behavior with respect to research and development. Our findings show that access to imported inputs is the more significant vehicle for productivity enhancing effects of trade openness. Investment in technology is, by far, most strongly correlated with plant productivity. Like productivity, job turnover at firm level is strongly influenced by the degree of integration in international markets, import competition, and R&D behavior.
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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number
993.
Find related papers by JEL classification: C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: General - - - Semiparametric and Nonparametric Methods D24 - Microeconomics - - Production and Organizations - - - Production; Capital and Total Factor Productivity; Capacity F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations O54 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean
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