Is Mexico a Lumpy Country?

Andrew B. Bernard, Raymond Robertson and Peter K. Schott

Chapter 13 in Not Just Neighbors:The Remarkable Economic Relationships in North America, 2026, pp 443-464 from World Scientific Publishing Co. Pte. Ltd.

Abstract: Courant and Deardorff (1992) show theoretically that an extremely uneven distribution of factors within a country can induce behavior at odds with overall comparative advantage. We demonstrate the importance of this insight for developing countries. We show that Mexican regions exhibit substantial variation in skill abundance, offer significantly different relative factor rewards, and produce disjoint sets of industries. This heterogeneity helps both to undermine Mexico’s aggregate labor abundance and to motivate behavior that is more consistent with relative skill abundance.

Keywords: US–Mexico Trade; Economic Integration; North American Competitiveness; USMCA / NAFTA; Global Supply Chains; Migration and Labor Markets; Wage Inequality; Cross-border Economics; Trade Policy and Development; Regional Economic Integration; US–Mexico Relations; Bilateral Trade Flows; Border Economy; Globalization and Inequality; Policy Responses to Trade Shocks (search for similar items in EconPapers)
JEL-codes: F13 F15 F22 J61 O24 P16 P52 (search for similar items in EconPapers)
Date: 2026
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