Economic Performance under NAFTA : A Firm-Level Analysis of the Trade-Productivity Linkages

Did the North American Free Trade Agreement make Mexican firms more productive? If so, through which channels? This paper addresses these questions by deploying an innovative microeconometric approach that disentangles the various channels through...

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Main Authors:	De Hoyos, Rafael E., Iacovone, Leonardo
Format:	Policy Research Working Paper
Language:	English
Published:	2012
Subjects:	ABSOLUTE VALUE ACCESS TO FOREIGN MARKETS ALLOCATIVE EFFICIENCY ATTRITION AVERAGE PRODUCTIVITY AVERAGE TARIFF BALANCE OF PAYMENTS BALANCE OF PAYMENTS CRISIS BASE YEAR CAPITAL PER WORKER COMPARATIVE ADVANTAGE COMPETITIVE PRESSURES COMPETITIVENESS CONCEPTUAL FRAMEWORK CRISES DEVALUATION DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DEVELOPMENT STRATEGIES DISCUSSION DISCUSSIONS DOMESTIC COMPETITION DOMESTIC DEMAND DOMESTIC MARKET DRIVERS ECONOMETRIC ANALYSIS ECONOMIC CRISIS ECONOMIC GROWTH ECONOMIC IMPLICATIONS ECONOMIC INTEGRATION ECONOMIC PERFORMANCE ECONOMIC THEORY ECONOMIES OF SCALE ENTREPRENEURS EXCHANGE RATE MOVEMENTS EXOGENOUS SHOCKS EXPORT MARKETS EXPORTERS EXPORTS EXTERNALITIES FINAL GOODS FIRM SIZE FIRMS FOREIGN COMPETITORS FOREIGN DIRECT INVESTMENTS FOREIGN INVESTMENT FOREIGN MARKETS FOREIGN OWNERSHIP FOREIGN TRADE FREE TRADE GDP GENERAL EQUILIBRIUM GLOBAL ECONOMY GLOBAL MARKETS GROWTH MODELS GROWTH RATE IDEA IDEAS IMPACT OF TRADE IMPACT OF TRADE LIBERALIZATION IMPACT OF TRADE REFORMS IMPORT COMPETITION IMPORT TARIFF IMPORT TARIFFS INCREASING RETURNS INDEX NUMBERS INDUSTRIAL PRODUCTION INEFFICIENCY INNOVATION INTERMEDIATE GOODS INTERMEDIATE INPUTS INTERNATIONAL AGREEMENTS INTERNATIONAL MARKETS INTERNATIONAL TRADE INTUITION INVENTORIES KNOWLEDGE SPILLOVERS LABOR PRODUCTIVITY LABOUR LABOUR PRODUCTIVITY LEARNING MACROECONOMIC SHOCKS MANUFACTURERS MANUFACTURING ESTABLISHMENT MANUFACTURING PRODUCTIVITY MARKET ACCESS MARKET SHARES MARKET SIZE MARKET STRUCTURE MULTILATERAL TRADE MULTILATERAL TRADE LIBERALIZATION OPENNESS POSITIVE EFFECTS PROCESS OF TRADE INTEGRATION PROCESS OF TRADE LIBERALIZATION PRODUCTIVITY PRODUCTIVITY GROWTH REAL EXCHANGE RATE REAL INCOME REDUCTION IN TARIFFS REGIONAL INTEGRATION REGIONAL TRADE REGIONAL TRADE ARRANGEMENTS SCALE EFFECTS SMALL FIRMS SPECIALIZATION STOCK PRICES SUNK COSTS TARIFF RATES TARIFF REDUCTION TARIFF REDUCTIONS TELECOMMUNICATIONS TRADE AGREEMENT TRADE BARRIERS TRADE EXPANSION TRADE LIBERALIZATION TRADE LIBERALIZATION PERIOD TRADE MODELS TRADE PARTNERS TRADE POLICY TRADE REFORM TRADE REFORMS TRADE THEORIES TRADE VOLUMES UNDERLYING ASSUMPTIONS VALUE ADDED WAGE INEQUALITY WAGES
Online Access:	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20110517160032 http://hdl.handle.net/10986/3424

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spelling	okr-10986-34242021-04-23T14:02:09Z Economic Performance under NAFTA : A Firm-Level Analysis of the Trade-Productivity Linkages De Hoyos, Rafael E. Iacovone, Leonardo ABSOLUTE VALUE ACCESS TO FOREIGN MARKETS ALLOCATIVE EFFICIENCY ATTRITION AVERAGE PRODUCTIVITY AVERAGE TARIFF BALANCE OF PAYMENTS BALANCE OF PAYMENTS CRISIS BASE YEAR CAPITAL PER WORKER COMPARATIVE ADVANTAGE COMPETITIVE PRESSURES COMPETITIVENESS CONCEPTUAL FRAMEWORK CRISES DEVALUATION DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DEVELOPMENT STRATEGIES DISCUSSION DISCUSSIONS DOMESTIC COMPETITION DOMESTIC DEMAND DOMESTIC MARKET DRIVERS ECONOMETRIC ANALYSIS ECONOMIC CRISIS ECONOMIC GROWTH ECONOMIC IMPLICATIONS ECONOMIC INTEGRATION ECONOMIC PERFORMANCE ECONOMIC THEORY ECONOMIES OF SCALE ENTREPRENEURS EXCHANGE RATE MOVEMENTS EXOGENOUS SHOCKS EXPORT MARKETS EXPORTERS EXPORTS EXTERNALITIES FINAL GOODS FIRM SIZE FIRMS FOREIGN COMPETITORS FOREIGN DIRECT INVESTMENTS FOREIGN INVESTMENT FOREIGN MARKETS FOREIGN OWNERSHIP FOREIGN TRADE FREE TRADE GDP GENERAL EQUILIBRIUM GLOBAL ECONOMY GLOBAL MARKETS GROWTH MODELS GROWTH RATE IDEA IDEAS IMPACT OF TRADE IMPACT OF TRADE LIBERALIZATION IMPACT OF TRADE REFORMS IMPORT COMPETITION IMPORT TARIFF IMPORT TARIFFS INCREASING RETURNS INDEX NUMBERS INDUSTRIAL PRODUCTION INEFFICIENCY INNOVATION INTERMEDIATE GOODS INTERMEDIATE INPUTS INTERNATIONAL AGREEMENTS INTERNATIONAL MARKETS INTERNATIONAL TRADE INTUITION INVENTORIES KNOWLEDGE SPILLOVERS LABOR PRODUCTIVITY LABOUR LABOUR PRODUCTIVITY LEARNING MACROECONOMIC SHOCKS MANUFACTURERS MANUFACTURING ESTABLISHMENT MANUFACTURING PRODUCTIVITY MARKET ACCESS MARKET SHARES MARKET SIZE MARKET STRUCTURE MULTILATERAL TRADE MULTILATERAL TRADE LIBERALIZATION OPENNESS POSITIVE EFFECTS PROCESS OF TRADE INTEGRATION PROCESS OF TRADE LIBERALIZATION PRODUCTIVITY PRODUCTIVITY GROWTH REAL EXCHANGE RATE REAL INCOME REDUCTION IN TARIFFS REGIONAL INTEGRATION REGIONAL TRADE REGIONAL TRADE ARRANGEMENTS SCALE EFFECTS SMALL FIRMS SPECIALIZATION STOCK PRICES SUNK COSTS TARIFF RATES TARIFF REDUCTION TARIFF REDUCTIONS TELECOMMUNICATIONS TRADE AGREEMENT TRADE BARRIERS TRADE EXPANSION TRADE LIBERALIZATION TRADE LIBERALIZATION PERIOD TRADE MODELS TRADE PARTNERS TRADE POLICY TRADE REFORM TRADE REFORMS TRADE THEORIES TRADE VOLUMES UNDERLYING ASSUMPTIONS VALUE ADDED WAGE INEQUALITY WAGES Did the North American Free Trade Agreement make Mexican firms more productive? If so, through which channels? This paper addresses these questions by deploying an innovative microeconometric approach that disentangles the various channels through which integration with the global markets (via international trade) can affect firm-level productivity. The results show that the North American Free Trade Agreement stimulated the productivity of Mexican plants via: (1) an increase in import competition and (2) a positive effect on access to imported intermediate inputs. However, the impact of trade reforms was not identical for all integrated firms, with fully integrated firms (i.e. firms simultaneously exporting and importing) benefiting more than other integrated firms. Contrary to previous results, once self-selection problems are solved, the analysis finds a rather weak relationship between exports and productivity growth. 2012-03-19T18:02:13Z 2012-03-19T18:02:13Z 2011-05-01 http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20110517160032 http://hdl.handle.net/10986/3424 English Policy Research working paper ; no. WPS 5661 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank Publications & Research :: Policy Research Working Paper Latin America & Caribbean North America America
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	ABSOLUTE VALUE ACCESS TO FOREIGN MARKETS ALLOCATIVE EFFICIENCY ATTRITION AVERAGE PRODUCTIVITY AVERAGE TARIFF BALANCE OF PAYMENTS BALANCE OF PAYMENTS CRISIS BASE YEAR CAPITAL PER WORKER COMPARATIVE ADVANTAGE COMPETITIVE PRESSURES COMPETITIVENESS CONCEPTUAL FRAMEWORK CRISES DEVALUATION DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DEVELOPMENT STRATEGIES DISCUSSION DISCUSSIONS DOMESTIC COMPETITION DOMESTIC DEMAND DOMESTIC MARKET DRIVERS ECONOMETRIC ANALYSIS ECONOMIC CRISIS ECONOMIC GROWTH ECONOMIC IMPLICATIONS ECONOMIC INTEGRATION ECONOMIC PERFORMANCE ECONOMIC THEORY ECONOMIES OF SCALE ENTREPRENEURS EXCHANGE RATE MOVEMENTS EXOGENOUS SHOCKS EXPORT MARKETS EXPORTERS EXPORTS EXTERNALITIES FINAL GOODS FIRM SIZE FIRMS FOREIGN COMPETITORS FOREIGN DIRECT INVESTMENTS FOREIGN INVESTMENT FOREIGN MARKETS FOREIGN OWNERSHIP FOREIGN TRADE FREE TRADE GDP GENERAL EQUILIBRIUM GLOBAL ECONOMY GLOBAL MARKETS GROWTH MODELS GROWTH RATE IDEA IDEAS IMPACT OF TRADE IMPACT OF TRADE LIBERALIZATION IMPACT OF TRADE REFORMS IMPORT COMPETITION IMPORT TARIFF IMPORT TARIFFS INCREASING RETURNS INDEX NUMBERS INDUSTRIAL PRODUCTION INEFFICIENCY INNOVATION INTERMEDIATE GOODS INTERMEDIATE INPUTS INTERNATIONAL AGREEMENTS INTERNATIONAL MARKETS INTERNATIONAL TRADE INTUITION INVENTORIES KNOWLEDGE SPILLOVERS LABOR PRODUCTIVITY LABOUR LABOUR PRODUCTIVITY LEARNING MACROECONOMIC SHOCKS MANUFACTURERS MANUFACTURING ESTABLISHMENT MANUFACTURING PRODUCTIVITY MARKET ACCESS MARKET SHARES MARKET SIZE MARKET STRUCTURE MULTILATERAL TRADE MULTILATERAL TRADE LIBERALIZATION OPENNESS POSITIVE EFFECTS PROCESS OF TRADE INTEGRATION PROCESS OF TRADE LIBERALIZATION PRODUCTIVITY PRODUCTIVITY GROWTH REAL EXCHANGE RATE REAL INCOME REDUCTION IN TARIFFS REGIONAL INTEGRATION REGIONAL TRADE REGIONAL TRADE ARRANGEMENTS SCALE EFFECTS SMALL FIRMS SPECIALIZATION STOCK PRICES SUNK COSTS TARIFF RATES TARIFF REDUCTION TARIFF REDUCTIONS TELECOMMUNICATIONS TRADE AGREEMENT TRADE BARRIERS TRADE EXPANSION TRADE LIBERALIZATION TRADE LIBERALIZATION PERIOD TRADE MODELS TRADE PARTNERS TRADE POLICY TRADE REFORM TRADE REFORMS TRADE THEORIES TRADE VOLUMES UNDERLYING ASSUMPTIONS VALUE ADDED WAGE INEQUALITY WAGES
spellingShingle	ABSOLUTE VALUE ACCESS TO FOREIGN MARKETS ALLOCATIVE EFFICIENCY ATTRITION AVERAGE PRODUCTIVITY AVERAGE TARIFF BALANCE OF PAYMENTS BALANCE OF PAYMENTS CRISIS BASE YEAR CAPITAL PER WORKER COMPARATIVE ADVANTAGE COMPETITIVE PRESSURES COMPETITIVENESS CONCEPTUAL FRAMEWORK CRISES DEVALUATION DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DEVELOPMENT STRATEGIES DISCUSSION DISCUSSIONS DOMESTIC COMPETITION DOMESTIC DEMAND DOMESTIC MARKET DRIVERS ECONOMETRIC ANALYSIS ECONOMIC CRISIS ECONOMIC GROWTH ECONOMIC IMPLICATIONS ECONOMIC INTEGRATION ECONOMIC PERFORMANCE ECONOMIC THEORY ECONOMIES OF SCALE ENTREPRENEURS EXCHANGE RATE MOVEMENTS EXOGENOUS SHOCKS EXPORT MARKETS EXPORTERS EXPORTS EXTERNALITIES FINAL GOODS FIRM SIZE FIRMS FOREIGN COMPETITORS FOREIGN DIRECT INVESTMENTS FOREIGN INVESTMENT FOREIGN MARKETS FOREIGN OWNERSHIP FOREIGN TRADE FREE TRADE GDP GENERAL EQUILIBRIUM GLOBAL ECONOMY GLOBAL MARKETS GROWTH MODELS GROWTH RATE IDEA IDEAS IMPACT OF TRADE IMPACT OF TRADE LIBERALIZATION IMPACT OF TRADE REFORMS IMPORT COMPETITION IMPORT TARIFF IMPORT TARIFFS INCREASING RETURNS INDEX NUMBERS INDUSTRIAL PRODUCTION INEFFICIENCY INNOVATION INTERMEDIATE GOODS INTERMEDIATE INPUTS INTERNATIONAL AGREEMENTS INTERNATIONAL MARKETS INTERNATIONAL TRADE INTUITION INVENTORIES KNOWLEDGE SPILLOVERS LABOR PRODUCTIVITY LABOUR LABOUR PRODUCTIVITY LEARNING MACROECONOMIC SHOCKS MANUFACTURERS MANUFACTURING ESTABLISHMENT MANUFACTURING PRODUCTIVITY MARKET ACCESS MARKET SHARES MARKET SIZE MARKET STRUCTURE MULTILATERAL TRADE MULTILATERAL TRADE LIBERALIZATION OPENNESS POSITIVE EFFECTS PROCESS OF TRADE INTEGRATION PROCESS OF TRADE LIBERALIZATION PRODUCTIVITY PRODUCTIVITY GROWTH REAL EXCHANGE RATE REAL INCOME REDUCTION IN TARIFFS REGIONAL INTEGRATION REGIONAL TRADE REGIONAL TRADE ARRANGEMENTS SCALE EFFECTS SMALL FIRMS SPECIALIZATION STOCK PRICES SUNK COSTS TARIFF RATES TARIFF REDUCTION TARIFF REDUCTIONS TELECOMMUNICATIONS TRADE AGREEMENT TRADE BARRIERS TRADE EXPANSION TRADE LIBERALIZATION TRADE LIBERALIZATION PERIOD TRADE MODELS TRADE PARTNERS TRADE POLICY TRADE REFORM TRADE REFORMS TRADE THEORIES TRADE VOLUMES UNDERLYING ASSUMPTIONS VALUE ADDED WAGE INEQUALITY WAGES De Hoyos, Rafael E. Iacovone, Leonardo Economic Performance under NAFTA : A Firm-Level Analysis of the Trade-Productivity Linkages
geographic_facet	Latin America & Caribbean North America America
relation	Policy Research working paper ; no. WPS 5661
description	Did the North American Free Trade Agreement make Mexican firms more productive? If so, through which channels? This paper addresses these questions by deploying an innovative microeconometric approach that disentangles the various channels through which integration with the global markets (via international trade) can affect firm-level productivity. The results show that the North American Free Trade Agreement stimulated the productivity of Mexican plants via: (1) an increase in import competition and (2) a positive effect on access to imported intermediate inputs. However, the impact of trade reforms was not identical for all integrated firms, with fully integrated firms (i.e. firms simultaneously exporting and importing) benefiting more than other integrated firms. Contrary to previous results, once self-selection problems are solved, the analysis finds a rather weak relationship between exports and productivity growth.
format	Publications & Research :: Policy Research Working Paper
author	De Hoyos, Rafael E. Iacovone, Leonardo
author_facet	De Hoyos, Rafael E. Iacovone, Leonardo
author_sort	De Hoyos, Rafael E.
title	Economic Performance under NAFTA : A Firm-Level Analysis of the Trade-Productivity Linkages
title_short	Economic Performance under NAFTA : A Firm-Level Analysis of the Trade-Productivity Linkages
title_full	Economic Performance under NAFTA : A Firm-Level Analysis of the Trade-Productivity Linkages
title_fullStr	Economic Performance under NAFTA : A Firm-Level Analysis of the Trade-Productivity Linkages
title_full_unstemmed	Economic Performance under NAFTA : A Firm-Level Analysis of the Trade-Productivity Linkages
title_sort	economic performance under nafta : a firm-level analysis of the trade-productivity linkages
publishDate	2012
url	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20110517160032 http://hdl.handle.net/10986/3424
_version_	1764386974822563840

Economic Performance under NAFTA : A Firm-Level Analysis of the Trade-Productivity Linkages

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