The Impact of NAFTA on Prices and Competition: Evidence from Mexican Manufacturing Plants

Felipe Brugués, Ken Kikkawa, Yuan Mei and Pablo Robles

No 33516, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper assesses the impact of the North American Free Trade Agreement on Mexican manufacturing plants’ output prices and markups. We distinguish between Mexican goods that are exported and those sold domestically, and decompose their prices separately into markups and marginal costs. We then analyze how these components were affected by the reductions in Mexican output tariffs, intermediate input tariffs, and U.S. tariffs on Mexican exports. We find that domestically sold products saw a decline in prices as Mexican plants faced more competition and gained access to cheaper inputs. Prices of exported goods fell only slightly as plants increased their markups in response to a favorable competitive environment due to declines in U.S. tariffs.

JEL-codes: F12 F14 (search for similar items in EconPapers)
Date: 2025-02
Note: ITI
References: Add references at CitEc
Citations:

Published as Felipe Brugués & Ayumu Ken Kikkawa & Yuan Mei & Pablo Robles, 2025. "The impact of NAFTA on prices and competition: Evidence from Mexican manufacturing plants," Journal of International Economics, vol 155.

Downloads: (external link)
http://www.nber.org/papers/w33516.pdf (application/pdf)
Access to the full text is generally limited to series subscribers, however if the top level domain of the client browser is in a developing country or transition economy free access is provided. More information about subscriptions and free access is available at http://www.nber.org/wwphelp.html. Free access is also available to older working papers.

Related works:
Working Paper: The Impact of NAFTA on Prices and Competition: Evidence from Mexican Manufacturing Plants (2019)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:33516

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w33516
The price is Paper copy available by mail.

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().