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The participation of Mexico in global supply chains: the challenge of adding Mexican value

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  • Juan S. Blyde

Abstract

There is a general perception that Mexico's insertion in global supply chains has been mostly in assembly operations and that efforts should be made to incorporate additional domestic value in the international production networks in which the country participates. To examine this issue properly one needs to have a measure of the share of domestic value added that is effectively embodied in Mexico's exports. We analyse firm-level data from the Manufacturing Industry, maquiladora and Export Services Program census which covers all the firms that benefit from the Maquiladora and the Program of Temporary Imports to Produce Export Goods programs. We find that the share of domestic value added as a proportion of the firm's exports has been declining in the last 6 years. We show that the decline is not the result of market share reallocations; that it persists after controlling for price changes and that is observed across firms of all sizes. The results suggest that more segments of the supply chains are generally not moving into Mexico and that on the contrary there is a trend of falling domestic value added. This result contrasts with that of other countries engaged in similar export processing activities, like China.

Suggested Citation

  • Juan S. Blyde, 2014. "The participation of Mexico in global supply chains: the challenge of adding Mexican value," Applied Economics Letters, Taylor & Francis Journals, vol. 21(7), pages 501-504, May.
    • Handle: RePEc:taf:apeclt:v:21:y:2014:i:7:p:501-504
    DOI: 10.1080/13504851.2013.870647
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    Cited by:

    1. Anthony William Donald Anastasi, 2024. "The middle-income trap and foreign direct investment: a mixed-methods approach centered on Mexico and South Korea," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-14, December.
    2. Jorge Luis García-Alcaraz & Aidé Aracely Maldonado-Macías & Sandra Ivette Hernández-Hernández & Juan Luis Hernández-Arellano & Julio Blanco-Fernández & Juan Carlos Sáenz Díez-Muro, 2016. "New Product Development and Innovation in the Maquiladora Industry: A Causal Model," Sustainability, MDPI, vol. 8(8), pages 1-18, July.
    3. Padilla-Pérez, Ramón & Villarreal, Francisco G., 2017. "Structural change and productivity growth in Mexico, 1990–2014," Structural Change and Economic Dynamics, Elsevier, vol. 41(C), pages 53-63.
    4. Robert Devlin & Carlo Pietrobelli, 2019. "Modern Industrial Policy and Public-Private Councils at the Subnational Level: Mexico’s Experience in an International Perspective," L'industria, Società editrice il Mulino, issue 4, pages 761-791.
    5. Antonio Oswaldo Ortega-Reyes & Eva Selene Hernández Gress & Carlos Robles-Acosta, 2018. "Case Study Based Model to Propose the Integration of Suppliers in a Central State in Mexico," Administrative Sciences, MDPI, vol. 8(2), pages 1-20, April.

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