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NAFTA and productivity convergence between Mexico and the US

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Abstract

This paper studies whether NAFTA contributed to the productivity convergence between Mexico and the US. Using data from the manufacturing sector and introducing a number of refinements in the computation of the total factor productivity and estimation methods, it shows that NAFTA is associated with a higher speed of convergence of productivity levels than the previous literature found. The paper also finds that under NAFTA the industries which have smaller productivity gap experienced higher speed of convergence (catch-up) than the industries which have larger productivity gap.

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  • Tadashi Ito, 2007. "NAFTA and productivity convergence between Mexico and the US," IHEID Working Papers 26-2007, Economics Section, The Graduate Institute of International Studies, revised 27 Nov 2007.
    • Handle: RePEc:gii:giihei:heiwp26-2007
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    More about this item

    Keywords

    NAFTA; Productivity;

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies

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