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Measuring Total Factor Productivity Growth In Mexican Manufacturing: The Story Before And After Trade Liberalization

Author

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  • SYLVIA GUILLERMO

    ()

  • BEATA TANKA

    ()

Abstract

The paper focuses on measuring and analyzing TFP growth in Mexican manufacturing during the period 1970-2003 and its importance as a source of growth in income. The analysis time span covers the most important events of trade openness in Mexican economic history: GATT (1986) and NAFTA (1994), and this allows us to visualize TFP behavior in manufacturing before and after the trade liberalization events. TFP growth estimation is done at subsector level of desegregation and using Harberger’s Two Defl ator Method. The paper’s fi ndings indicate that trade liberalization, which was mainly driven by NAFTA, has enhanced manufacturing productivity in Mexico. Our estimation results show that annual average TFP growth rate in manufacturing was negative during the pre-NAFTA period while the post-NAFTA annual average TFP growth rate was positive.

Suggested Citation

  • Sylvia Guillermo & Beata Tanka, 2007. "Measuring Total Factor Productivity Growth In Mexican Manufacturing: The Story Before And After Trade Liberalization," Revista ESPE - Ensayos sobre Política Económica, Banco de la Republica de Colombia, vol. 25(53), pages 168-219, January.
  • Handle: RePEc:bdr:ensayo:v:25:y:2007:i:53:p:168-219
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    More about this item

    Keywords

    total factor productivity; productivity in Mexico; productivity in manufacturing; trade liberalization in Mexico; NAFTA;

    JEL classification:

    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • N6 - Economic History - - Manufacturing and Construction

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