TY - JOUR
T1 - Industry trade between Canada and Mexico
T2 - Will a weakening peso help Mexican manufacturing in the long run?
AU - Bahmani-Oskooee, Mohsen
AU - Bolhassani, Marzi
AU - Hegerty, Scott W.
PY - 2011/8/1
Y1 - 2011/8/1
N2 - Mexico has longed served as one of Canada's major trade partner, but the plunging peso has had drastic effects across North America. This study investigates the bilateral trade relationship between Canada and Mexico for 27 individual industries, from 1973 to 2006. Cointegration analysis shows that overall sensitivity to the real exchange rate is weak, but that the trade balances of certain manufacturing industries do indeed improve after a currency depreciation. The " J-curve" effect is present for certain electrical and mechanical industries, suggesting that the recent decline of the peso may currently be having a negative impact on Mexican trade-but that it might eventually be beneficial, particularly for the Machinery and Transport Equipment sector.
AB - Mexico has longed served as one of Canada's major trade partner, but the plunging peso has had drastic effects across North America. This study investigates the bilateral trade relationship between Canada and Mexico for 27 individual industries, from 1973 to 2006. Cointegration analysis shows that overall sensitivity to the real exchange rate is weak, but that the trade balances of certain manufacturing industries do indeed improve after a currency depreciation. The " J-curve" effect is present for certain electrical and mechanical industries, suggesting that the recent decline of the peso may currently be having a negative impact on Mexican trade-but that it might eventually be beneficial, particularly for the Machinery and Transport Equipment sector.
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U2 - 10.1016/j.najef.2010.09.002
DO - 10.1016/j.najef.2010.09.002
M3 - Article
AN - SCOPUS:79958279012
SN - 1062-9408
VL - 22
SP - 89
EP - 101
JO - North American Journal of Economics and Finance
JF - North American Journal of Economics and Finance
IS - 2
ER -