On the Evolution of Manufacturing Production Concentration in Mexican States and its Relationship to Their Level of Economic Complexity

Manuel Gómez-Zaldívar (), J. Alejandra Duran () and Jaime Carrillo-Botello ()
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Manuel Gómez-Zaldívar: Universidad de Guanajuato
J. Alejandra Duran: Universidad de Guanajuato
Jaime Carrillo-Botello: Universidad de Guanajuato

Lecturas de Economía, 2022, issue 97, 255-290

Abstract: We identify a link between the evolution of the concentration of manufacturing production among Mexican states and their level of economic complexity. Our results suggest that the concentration of manufacturing production among the country’s states evolved according to the predictions of standard models of international trade. However, the North American Free Trade Agreement (NAFTA) had a particular effect on each individual state, depending on its economic structure. More complex states, i.e., those more productively diverse and specialized in more sophisticated manufacturing goods, experienced a higher increase in their level of production concentration after NAFTA and were less affected by competition from Chinese exports to the U.S. In contrast, NAFTA had a less significant impact on the production concentration of less complex states, while competition from China halted their move towards greater specialization and even reversed it somewhat. These findings highlight the important role of international trade in shaping the development of the economic structure of Mexican states in the period under analysis.

Keywords: Economic integration; Economic complexity; NAFTA. (search for similar items in EconPapers)
JEL-codes: F15 L60 R11 R12 (search for similar items in EconPapers)
Date: 2022
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DOI: 10.17533/udea.le.n97a347123

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