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

Rafael De Hoyos () and Leonardo Iacovone ()

World Development, 2013, vol. 44, issue C, 180-193

Abstract: Did North American Free Trade Agreement (NAFTA) make Mexican firms more productive? If so, through which channels? This paper addresses these questions by deploying a robust microeconometric approach that disentangles the various channels through which integration with the global markets can affect firm-level productivity. The results show that NAFTA stimulated the productivity of Mexican plants via: (1) increase in import competition and (2) positive effect on access to imported intermediate inputs. Crucially, 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.

Keywords: firm-level productivity; trade reforms; Latin America; Mexico (search for similar items in EconPapers)
Date: 2013
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Working Paper: Economic performance under NAFTA: a firm-level analysis of the trade-productivity linkages (2011) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:eee:wdevel:v:44:y:2013:i:c:p:180-193

DOI: 10.1016/j.worlddev.2012.09.008

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