TY - JOUR
T1 - Trade liberalization and the dimensions of efficiency change in Mexican manufacturing industries
AU - Tybout, James R.
AU - Westbrook, M. Daniel
N1 - Funding Information:
* Corresponding author. ’ This paper was funded by Mexico’s Secretary of Commerce and Industrial Development (SECOFI), Office of Trade Negotiations. We thank Hans-Martin Boehmer and Jean-Marie Grether for excellent assistance with data preparation, and Kerry Dixon for help with background research. We also wish to thank Dani Rodrik, Neil Roger, Jaime Ros and participants in workshops at the World Bank, the 1992 Latin American Meeting of the Econometric Society, SECOFI, Pennsylvania State University, New York State University, the University of Pittsburgh, the University of Maryland, and Carleton University for comments. Finally, we are especially grateful to Fernando Clavijo, Economic Advisor to the President of Mexico, for initiating and overseeing this project.
PY - 1995/8
Y1 - 1995/8
N2 - Did Mexico's recent trade liberalization generate productivity gains? We find that average costs fell in most industries, with tradeable goods producers registering the largest reductions. Among importables, these cost reductions trace partly to improvements in relative productivity. Among exportables, they are due to favorable changes in relative prices, probably because imported intermediate goods became cheaper. Gains due to scale economy exploitation were minor and were not correlated with increases in foreign competition. Hence the results cast some doubt on simulation studies of trade liberalization that stress scale effects as a major source of efficiency gain.
AB - Did Mexico's recent trade liberalization generate productivity gains? We find that average costs fell in most industries, with tradeable goods producers registering the largest reductions. Among importables, these cost reductions trace partly to improvements in relative productivity. Among exportables, they are due to favorable changes in relative prices, probably because imported intermediate goods became cheaper. Gains due to scale economy exploitation were minor and were not correlated with increases in foreign competition. Hence the results cast some doubt on simulation studies of trade liberalization that stress scale effects as a major source of efficiency gain.
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U2 - 10.1016/0022-1996(94)01363-W
DO - 10.1016/0022-1996(94)01363-W
M3 - Article
AN - SCOPUS:0029486518
SN - 0022-1996
VL - 39
SP - 53
EP - 78
JO - Journal of International Economics
JF - Journal of International Economics
IS - 1-2
ER -