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Boosting productivity in Mexico through integration into global value chains

Author

Listed:
  • Sean Dougherty

    (OECD)

  • Julien Reynaud

    (International Monetary Fund)

Abstract

Mexico’s structural reforms are already boosting productivity, but more can be done. This paper focuses on issues that have led to the success of the “modern” Mexico, and have led to difficulties with the “traditional” Mexico. These include the success of Global Value Chains (GVCs) in advancing the trade integration and linkages of key sectors, as well as how competition problems, excessive local regulation, and weak legal institutions have led to misallocation across firms. This paper examines in particular Mexico’s successful integration into GVCs. OECD research suggests that GVC participation can bring economic benefits in terms of productivity, diversification and sophistication of production. Understanding what drives integration into GVCs provides policy guidance to support a wider integration.

Suggested Citation

  • Sean Dougherty & Julien Reynaud, 2017. "Boosting productivity in Mexico through integration into global value chains," OECD Economics Department Working Papers 1376, OECD Publishing.
    • Handle: RePEc:oec:ecoaaa:1376-en
    DOI: 10.1787/571d5b1f-en
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    More about this item

    Keywords

    competition; global value chains; international trade; misallocation; productivity;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F68 - International Economics - - Economic Impacts of Globalization - - - Policy
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy

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