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Cuadernos de economía

versión On-line ISSN 0717-6821

Cuad. econ. v.47 n.135 Santiago mayo 2010 

Cuadernos de Economía, Vol. 47 (Mayo), pp. 15-55, 2010

NAFTA and Productivity Convergence between Mexico and the US*


Tadashi Ito

Okinawa University, Japan


This paper revisits the question of whether NAFTA contributed to the productivity convergence between México and the US. It introduces improved procedures for generating total factor productivity (TFP) data and applies new and more appropriate econometric methods. With the se refinements, the paper provides some counter-evidence to the previous literature's findings of technology convergence toward a smaller gap level and NAFTA's positive effect on it. Our main result suggests an increasing TFP gap level, while some robustness checks, although not documenting increasing gaps, weaken the claim of the previous literature. The paper also applies a difference-in-difference approach and finds no evidence of sizeable effects of NAFTA.

JEL: F15, F43

Keywords: NAFTA, Productivity

Este artículo intenta responder la pregunta de si el acuerdo NAFTA ha contribuido a la convergencia en productividad entre México y los EE.UU. Introduce procedimientos alternativos en el cálculo de la productividad total de factores (TFP) y aplica métodos econométricos más apropiados que la literatura anterior. El artículo provee evidencia contraria a los resultados encontrados en estudios previos sobre la convergencia en productividad y el efecto que el TCL tiene sobre la misma. Un resultado encontrado sugiere un incremento de la brecha en TFP, y si bien las pruebas de robustez no apoyan este resultado, debilitan aquellos encontrados en la literatura anterior. El artículo también aplica el método de diferencia en las diferencias para identificar mejor los efectos del NAFTA pero no encuentra evidencia a su favor.



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* I am very grateful to my thesis advisers Richard E. Baldwin and John Cuddy at the Gradúate Institute, Geneva, for their invaluable comments and discussions. I also thank Manuel Arellano for his invaluable advice. My appreciation also goes to two anonymous referees of this journal, which helped me improve the paper substantially. I gratefully acknowledge financial support from the Matsushita International Foundation.

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