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Intermediate Inputs Industry and Industrial Restructuring: The Case of Mexico

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  • Chong-Sup Kim

Abstract

The questions explored in this paper are: Why GDP did not grow as much as exports? Why the structure of GDP did not change as much as that of exports after NAFTA? The reason of these was because a large part of the exports consisted of products assembled in Mexico using imported intermediate inputs. One of the products with the highest export growth rate was electric and electronic products, but because of its poorly developed parts industry, the value added in this industry did not increase so much. On the contrary, the automobile industry was not so dynamic as electronic industry in terms of exports, but its value added increased in a larger scale. This was thanks to a developed auto parts industry in Mexico. Government programs like PROSEC, which allowed a tariff free import of some intermediate inputs, and China's strong competitiveness in electronic sector and relatively weak competitiveness in automobile sector, also contributed to the different performance of Mexican electronic sector and automobile sector.

Suggested Citation

  • Chong-Sup Kim, 2008. "Intermediate Inputs Industry and Industrial Restructuring: The Case of Mexico," International Area Studies Review, Center for International Area Studies, Hankuk University of Foreign Studies, vol. 11(2), pages 195-216, September.
    • Handle: RePEc:sae:intare:v:11:y:2008:i:2:p:195-216
    DOI: 10.1177/223386590801100210
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