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Marx-Biased Technical Change and International Profit-Rate Convergence: The Case of Mexican Manufacturing

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  • Carlos A. Ibarra

Abstract

The article studies the fall in the output/capital (OC) ratio in Mexican manufacturing, contrasting the hypotheses of high labor costs versus convergence toward the United States as drivers of Marx-biased technical change. While econometric estimations reject the labor-cost hypothesis—as do the evidence from wage-profit curves—they support the convergence one, showing in addition that convergence increased with the degree of US-Mexican industrial integration. Downward OC convergence, moreover, led to downward convergence in profit rates. Convergence aside, capital accumulation itself pushed the OC ratio down, confirming a tendency of accumulation to depress the profit rate. The estimations—for the change in the profit rate and the OC ratio—rely on a comprehensive annual panel of 17 Mexican manufacturing industries over the period 1992–2019. JEL Classification: C23, F15, F63, O14, O33

Suggested Citation

  • Carlos A. Ibarra, 2025. "Marx-Biased Technical Change and International Profit-Rate Convergence: The Case of Mexican Manufacturing," Review of Radical Political Economics, Union for Radical Political Economics, vol. 57(2), pages 221-243, June.
    • Handle: RePEc:sae:reorpe:v:57:y:2025:i:2:p:221-243
    DOI: 10.1177/04866134241283502
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    References listed on IDEAS

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    More about this item

    Keywords

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    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • F15 - International Economics - - Trade - - - Economic Integration
    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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