Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/251281 
Year of Publication: 
2021
Series/Report no.: 
Working Papers No. 2021-10
Publisher: 
Banco de México, Ciudad de México
Abstract: 
This paper examines the impact of trade liberalization under NAFTA on the productivity of the Mexican automobile industry. Using a panel of establishments for the period 1994-2014, in a first stage a Cobb-Douglas production function is estimated by the Levinsohn and Petrin's (2003) method (in an alternative exercise by that of Ackerberg, Caves and Frazer, 2015) to obtain a productivity measure. In a second stage, a model is estimated by System GMM to analyze the effect of trade openness on the estimated productivity. The main results indicate that there exists a positive association between trade liberalization and productivity for medium size establishments, but not for small or large establishments. This finding is consistent with that of other authors, who find that trade liberalization results in higher productivity for some firms, but not for all of them (e.g. Lileeva and Trefler, 2010; Bustos, 2011).
Subjects: 
International Trade Agreements
Liberalization
NAFTA
Tariff
Automobile
Vehicles
Cobb Douglas
Production Function
Productivity
JEL: 
F13
L62
D24
Document Type: 
Working Paper
Appears in Collections:

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.