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Trade Liberalization and Location: Empirical Evidence for Mexican Manufacturing Industries

Author

Listed:
  • Jordaan, Jacob A.

    (Free U Amsterdam)

  • Sanchez-Reaza, Javier

    (CIDE, Mexico City)

Abstract

In this paper, we provide evidence based on New Economic Geography Models and estimate the statistical effects of second nature advantages to shed some light on the locational transformation of the manufacturing sector in Mexico. Changes in regional industry shares and regional wages during trade liberalization show that the border states have gained at the expense of the old manufacturing belt in Mexico City. Furthermore, the statistical evidence indicates that that the relevant market has shifted from Mexico City to the USA. However, the relation between trade liberalization and industry location is subject to a considerable level of industry heterogeneity, suggesting the co-existence of processes of regional convergence and divergence.

Suggested Citation

  • Jordaan, Jacob A. & Sanchez-Reaza, Javier, 2006. "Trade Liberalization and Location: Empirical Evidence for Mexican Manufacturing Industries," The Review of Regional Studies, Southern Regional Science Association, vol. 36(3), pages 279-303.
  • Handle: RePEc:rre:publsh:v:36:y:2006:i:3:p:279-303
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    File URL: http://journal.srsa.org/ojs/index.php/RRS/article/view/126/76
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    References listed on IDEAS

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    1. Villar, Olga Alonso, 1999. "Spatial distribution of production and international trade: a note," Regional Science and Urban Economics, Elsevier, vol. 29(3), pages 371-380, May.
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    Citations

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    Cited by:

    1. José Aguilar-Retureta, 2014. "The GDP per capita of the Mexican regions (1895-1930): new estimates," Documentos de Trabajo (DT-AEHE) 1415, Asociacion Espa–ola de Historia Economica.
    2. Jordaan, Jacob A., 2011. "FDI, Local Sourcing, and Supportive Linkages with Domestic Suppliers: The Case of Monterrey, Mexico," World Development, Elsevier, vol. 39(4), pages 620-632, April.
    3. José Aguilar-Retureta, 2015. "Regional income distribution in Mexico: new long-term evidence, 1895-2010," UB Economics Working Papers 2015/323, Universitat de Barcelona, Facultat d'Economia i Empresa, UB Economics.
    4. Jordaan, Jacob A., 2008. "Intra- and Inter-industry Externalities from Foreign Direct Investment in the Mexican Manufacturing Sector: New Evidence from Mexican Regions," World Development, Elsevier, vol. 36(12), pages 2838-2854, December.
    5. Jacob A. Jordaan, 2012. "Agglomeration and the location choice of foreign direct investment: new evidence from manufacturing FDI in Mexico," Estudios Económicos, El Colegio de México, Centro de Estudios Económicos, vol. 27(1), pages 61-97.
    6. Jacob Jordaan & Eduardo Rodriguez-Oreggia, 2012. "Regional growth in Mexico under trade liberalisation: how important are agglomeration and FDI?," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 48(1), pages 179-202, February.

    More about this item

    Keywords

    Economic Geography; Geography; Manufacturing; Regional; Trade;

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • R32 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Other Spatial Production and Pricing Analysis

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