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Is Mexico a Lumpy Country?

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  • Andrew B. Bernard
  • Raymond Robertson
  • Peter K. Schott

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.

Suggested Citation

  • Andrew B. Bernard & Raymond Robertson & Peter K. Schott, 2010. "Is Mexico a Lumpy Country?," Review of International Economics, Wiley Blackwell, vol. 18(5), pages 937-950, November.
    • Handle: RePEc:bla:reviec:v:18:y:2010:i:5:p:937-950
    DOI: 10.1111/j.1467-9396.2010.00918.x
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    Citations

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    Cited by:

    1. Christopher Blattman & Stefan Dercon, 2016. "Occupational Choice in Early Industrializing Societies: Experimental Evidence on the Income and Health Effects of Industrial and Entrepreneurial Work," Working Papers id:11361, eSocialSciences.
    2. David Atkin, 2016. "Endogenous Skill Acquisition and Export Manufacturing in Mexico," American Economic Review, American Economic Association, vol. 106(8), pages 2046-2085, August.
    3. Pol Antràs & Luis Garicano & Esteban Rossi-Hansberg, 2006. "Offshoring in a Knowledge Economy," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 121(1), pages 31-77.
    4. Soo, Kwok Tong, 2017. "Indivisibilities in the Ricardian model of trade," Economic Modelling, Elsevier, vol. 63(C), pages 311-317.
    5. Andrew B. Bernard & Stephen J. Redding & Peter K. Schott & Helen Simpson, 2008. "Relative Wage Variation and Industry Location in the United Kingdom," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 70(4), pages 431-459, August.
    6. Charles Van Marrewijk & Steven Brakman, 2011. "Missing trade and lumpy countries," ERSA conference papers ersa10p610, European Regional Science Association.
    7. Brakman, Steven & van Marrewijk, Charles, 2013. "Lumpy countries, urbanization, and trade," Journal of International Economics, Elsevier, vol. 89(1), pages 252-261.
    8. Blattman, Christopher & Dercon, Stefan & Franklin, Simon, 2022. "Impacts of industrial and entrepreneurial jobs on youth: 5-year experimental evidence on factory job offers and cash grants in Ethiopia," Journal of Development Economics, Elsevier, vol. 156(C).
    9. repec:lje:journl:v:20:y:2015:i:1:p:105-133 is not listed on IDEAS
    10. J. Eduardo Ibarra‐Olivo & Andrés Rodríguez‐Pose, 2022. "FDI and the growing wage gap in Mexican municipalities," Papers in Regional Science, Wiley Blackwell, vol. 101(6), pages 1411-1439, December.
    11. Steven Brakman & Tijl Hendrich & Charles van Marrewijk & Jennifer Olsen, 2023. "On the revealed comparative advantages of Dutch cities," Review of International Economics, Wiley Blackwell, vol. 31(3), pages 785-825, August.
    12. Kazuyuki Nakamura, 2015. "Computational investigation of the feasibility of factor price equalization," Letters in Spatial and Resource Sciences, Springer, vol. 8(2), pages 101-108, July.
    13. Resham Naveed, 2015. "Relative Factor Abundance and Relative Factor Price Equality in Punjab," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 20(1), pages 105-133, Jan-June.
    14. Andreas Waldkirch, 2010. "The Effects of Foreign Direct Investment in Mexico since NAFTA," The World Economy, Wiley Blackwell, vol. 33(5), pages 710-745, May.
    15. Steven Brakman & Tijl Hendrich & Charles Marrewijk & Jennifer Olsen, 2022. "Is Holland a Lumpy Country? An application of the Lens-Condition to Dutch Cities," De Economist, Springer, vol. 170(3), pages 305-321, August.
    16. Steven Brakman & Tijl Hendrich & Charles van Marrewijk & Jennifer Olsen & Charles van Marrewijk, 2020. "The Comparative Advantage of Dutch Cities," CESifo Working Paper Series 8649, CESifo.
    17. Raymond Robertson, 2007. "Trade and Wages: Two Puzzles from Mexico," The World Economy, Wiley Blackwell, vol. 30(9), pages 1378-1398, September.
    18. Kaplan, David S. & Lederman, Daniel & Robertson, Raymond, 2012. "What drives short-run labor market volatility in offshoring industries ? evidence from northern Mexico during 2007-2009," Policy Research Working Paper Series 6268, The World Bank.
    19. repec:hrv:faseco:4784031 is not listed on IDEAS

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    More about this item

    JEL classification:

    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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