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Measuring Total Factor Productivity Growth in Mexican Manufacturing: The Story Before and After Trade Liberalization







The paper focuses on measuring and analyzing TFPgrowth in Mexican manufacturing during the period1970-2003 and its importance as a source of growthin income. The analysis time span covers the mostimportant events of trade openness in Mexican economichistory: GATT (1986) and NAFTA (1994),and this allows us to visualize TFP behavior inmanufacturing before and after the trade liberalizationevents. TFP growth estimation is done at subsectorlevel of desegregation and using Harberger´sTwo Defl ator Method. The paper´s fi ndings indicatethat trade liberalization, which was mainly drivenby NAFTA, has enhanced manufacturing productivityin Mexico. Our estimation results show thatannual average TFP growth rate in manufacturingwas negative during the pre-NAFTA period whilethe post-NAFTA annual average TFP growth ratewas 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 República - ESPE, vol. 25(53), pages 168-219, January.
  • Handle: RePEc:col:000107:004634

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