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The Heterogeneous Impacts of Import Competition on Mexican Manufacturing Plants

Author

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  • Blyde, Juan S.
  • Fentanes, Oscar

Abstract

We study the impact of import competition on Mexican firm outcomes between 2003 and 2013 by exploiting variation in import penetration across industries. Focusing on the increase in import competition from China that Mexico experienced during this period, we find that the trade shock induced a decline in employment, sales, exports, and productivity. Importantly, the results show that the average impact hides significant heterogeneity effects, with smaller and less efficient plants experiencing the largest adjustments, while the most efficient plants exhibited relatively minor effects and, for some outcomes, no effects at all. The existence of heterogeneous impacts across establishments is consistent with other sets of findingsfor instance, that the productivity gap between small and large plants has been increasing over time and that the reallocation of resources has been productivity-enhancing, particularly in sectors that have experienced large-scale import penetration from China.

Suggested Citation

  • Blyde, Juan S. & Fentanes, Oscar, 2019. "The Heterogeneous Impacts of Import Competition on Mexican Manufacturing Plants," IDB Publications (Working Papers) 10000, Inter-American Development Bank.
    • Handle: RePEc:idb:brikps:10000
    DOI: http://dx.doi.org/10.18235/0002048
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    Cited by:

    1. Benavente, Jose Miguel & Zuniga, Pluvia, 2021. "How does market competition affect firm innovation incentives in emerging countries? Evidence from Latin American firms," MERIT Working Papers 2021-024, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    2. Rut Atayde & Rafael Garduño & Eduardo Robles & Pluvia Zúñiga, 2021. "Market competition and firm productivity and innovation: Responses in Mexican manufacturing industries," Regional Science Policy & Practice, Wiley Blackwell, vol. 13(4), pages 1185-1214, August.

    More about this item

    Keywords

    import competition; manufacturing plants; productivity;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • F61 - International Economics - - Economic Impacts of Globalization - - - Microeconomic Impacts

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