Economic performance under NAFTA : a firm-level analysis of the trade-productivity linkages
AbstractDid the North American Free Trade Agreement make Mexican firms more productive? If so, through which channels? This paper addresses these questions by deploying an innovative microeconometric approach that disentangles the various channels through which integration with the global markets (via international trade) can affect firm-level productivity. The results show that the North American Free Trade Agreement stimulated the productivity of Mexican plants via: (1) an increase in import competition and (2) a positive effect on access to imported intermediate inputs. However, the impact of trade reforms was not identical for all integrated firms, with fully integrated firms (i.e. firms simultaneously exporting and importing) benefiting more than other integrated firms. Contrary to previous results, once self-selection problems are solved, the analysis finds a rather weak relationship between exports and productivity growth.
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Bibliographic InfoPaper provided by The World Bank in its series Policy Research Working Paper Series with number 5661.
Date of creation: 01 May 2011
Date of revision:
Economic Theory&Research; Free Trade; Labor Policies; Knowledge for Development; Microfinance;
Other versions of this item:
- De Hoyos, Rafael E. & Iacovone, Leonardo, 2013. "Economic Performance under NAFTA: A Firm-Level Analysis of the Trade-productivity Linkages," World Development, Elsevier, vol. 44(C), pages 180-193.
- NEP-ALL-2011-05-30 (All new papers)
- NEP-EFF-2011-05-30 (Efficiency & Productivity)
- NEP-INT-2011-05-30 (International Trade)
- NEP-MIC-2011-05-30 (Microeconomics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- De Hoyos, Rafael E., 2005. "The Microeconomics of Inequality, Poverty and Market Liberalizing Reforms," Working Paper Series RP2005/63, World Institute for Development Economic Research (UNU-WIDER).
- François Bourguignon & Maurizio Bussolo & Luiz A. Pereira da Silva, 2008. "The Impact of Macroeconomic Policies on Poverty and Income Distribution : Macro-Micro Evaluation Techniques and Tools," World Bank Publications, The World Bank, number 6586.
- Iacovone, Leonardo, 2009.
"The better you are the stronger it makes you : evidence on the asymmetric impact of liberalization,"
Policy Research Working Paper Series
4930, The World Bank.
- Iacovone, Leonardo, 2012. "The better you are the stronger it makes you: Evidence on the asymmetric impact of liberalization," Journal of Development Economics, Elsevier, vol. 99(2), pages 474-485.
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