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A Note on Mexico and U.S. Manufacturing Industries' Long-term Relationship

Author

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  • Chiquiar Daniel
  • Ramos Francia Manuel

Abstract

The results in Chiquiar and Ramos-Francia (2005) suggested that the long-run relationship between the US's and Mexico's manufacturing sectors was weakened after China joined the World Trade Organization (WTO). When that paper was made, however, this shock was too recent and, therefore, the analysis was based only on end-of-sample structural break tests. In this note we use updated information to revisit this issue. The results suggest that, by shifting resources towards those sectors where it remained competitive, Mexico's response allowed the effect of China's entry to the WTO on its long-term relationship with the U.S. manufacturing sector to be only temporary.

Suggested Citation

  • Chiquiar Daniel & Ramos Francia Manuel, 2008. "A Note on Mexico and U.S. Manufacturing Industries' Long-term Relationship," Working Papers 2008-08, Banco de México.
    • Handle: RePEc:bdm:wpaper:2008-08
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    File URL: https://www.banxico.org.mx/publications-and-press/banco-de-mexico-working-papers/%7B3E669F9E-1FA9-4037-71CC-2734F3D0B399%7D.pdf
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    References listed on IDEAS

    as
    1. Seo, Byeongseon, 1998. "Tests For Structural Change In Cointegrated Systems," Econometric Theory, Cambridge University Press, vol. 14(2), pages 222-259, April.
    2. Balassa, Bela, 1979. "The Changing Pattern of Comparative Advantage in Manufactured Goods," The Review of Economics and Statistics, MIT Press, vol. 61(2), pages 259-266, May.
    3. Johansen, Soren, 1991. "Estimation and Hypothesis Testing of Cointegration Vectors in Gaussian Vector Autoregressive Models," Econometrica, Econometric Society, vol. 59(6), pages 1551-1580, November.
    4. Chiquiar, Daniel & Ramos-Francia, Manuel, 2005. "Trade and business-cycle synchronization: evidence from Mexican and U.S. manufacturing industries," The North American Journal of Economics and Finance, Elsevier, vol. 16(2), pages 187-216, August.
    5. Chiquiar Daniel & Fragoso Edna & Ramos Francia Manuel, 2007. "Comparative Advantage and the Performance of Mexican Manufacturing Exports during 1996-2005," Working Papers 2007-12, Banco de México.
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    Cited by:

    1. Timothy Halliday & Daniel Lederman & Raymond Robertson, 2018. "Tracking wage inequality trends with prices and different trade models: evidence from Mexico," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 154(1), pages 47-73, February.
    2. Chiquiar Daniel & Ramos Francia Manuel, 2009. "Competitiveness and Growth of the Mexican Economy," Working Papers 2009-11, Banco de México.

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    More about this item

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • F15 - International Economics - - Trade - - - Economic Integration
    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements

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