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Nafta¡¯S Impact On The Mexican Automotive Sector

Author

Listed:
  • Lila J. Truett

    (Division of Economics and Finance, The University of Texas at San Antonio)

  • Dale B. Truett

    (Division of Economics and Finance, The University of Texas at San Antonio)

Abstract

The findings discussed here are the outcome of continuing research on the Mexican automotive industry and include data for several years during which the NAFTA was in effect. Key results include strong evidence of constant returns to scale in both the automotive industry as a whole as well as the vehicle assembly industry and a finding that the period after NAFTA was implemented has been associated with lower production costs. In addition, these data support the conclusion that capital, labor, and foreign intermediate goods are all substitutes for one another, as are capital and domestic intermediate goods, but that labor and domestic intermediate goods are complements. While evidence was found to suggest some increased responsiveness in domestic markets to both foreign and domestic input prices, other results give reason for concern about continuing market impediments in Mexico.

Suggested Citation

  • Lila J. Truett & Dale B. Truett, 2005. "Nafta¡¯S Impact On The Mexican Automotive Sector," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 30(2), pages 155-176, December.
    • Handle: RePEc:jed:journl:v:30:y:2005:i:2:p:155-176
    as

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    File URL: http://www.jed.or.kr/full-text/30-2/J08_709.PDF
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    References listed on IDEAS

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    More about this item

    Keywords

    Mexico; Automotive Industry; NAFTA;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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