An application of a concentration index with Stata: Exports in the states of Mexico and the United States using Stata

Dora Haydee Valenzuela Miranda and Arturo Robles Valencia
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Dora Haydee Valenzuela Miranda: Universidad de Sonora
Arturo Robles Valencia: Universidad de Sonora

Mexican Stata Conference 2023 from Stata Users Group

Abstract: The commercial relationship between Mexico and the United States of America is of great importance at the international level; it has been formalized since 1994 by the North American Free Trade Agreement (NAFTA), now replaced by the United States–Mexico–Canada Agreement (USMCA). When the USMCA entered into force, the volume of trade has grown considerably between the North American partners because it ought to strengthen the economic relationship of these nations. However, some countries present a high commercial concentration due to the exports and imports carried out between countries to satisfy the demands of the commercial partners. By using Stata, the Herfindahl–Hirschmann index (HHI) is computed (Ansari 2012) with the command version hhi5 by Yujun and Lian (2016) and concentration indexes of exports from Mexico and the United States of America to perform an analysis of exports in the states of the mentioned countries, to identify the position of the key states for cross-border trade through commercial corridors established by the USMCA, where 70% of North American trade moves. The most important corridors are the West Coast Corridor, the Canamex Corridor, and the North American Superhighway Corridor.

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