Mexican manufacturing markups: procyclical behavior and the impact of trade liberalization
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| Formato: | Artículo científico |
| Lenguaje: | en |
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Centro de Investigación y Docencia Económicas, A.C.
2003
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| _version_ | 1876431673738919936 |
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| author | Alejandro Castañeda |
| author_facet | Alejandro Castañeda |
| contents | Mexican manufacturing markups: procyclical behavior and the impact of trade liberalization Alejandro Castañeda Economía y Finanzas Mexico markups market power manufacturing sector trade liberalization This paper estimates the markup for the Mexican manufacturingsector to detect the impact of trade liberalization on market power. UsingHalls proposal that states that a procyclical Solow residual is an indicationof market power, this research estimates the markup for different periodsto detect the change in market power after trade liberalization wasimplemented. We account for the potential cyclical behavior of the markupby including procyclical variables that affect the markup. The data showsa markup that moves counter-cyclically. The evidence is consistent withtheoretical arguments advanced by Rotemberg and Saloner (1986). Wepool four-digit industries and obtain estimates of the markup for thewhole manufacturing sector. For the entire manufacturing sector, we findthat trade liberalization acts as a market disciplining device that reducesthe degree of market power. At the sector level, we find a significantreduction in market power in those sectors that experienced a strongliberalization process after the GATT negotiations. Also, those sectors thatshow a reduction in market power after the NAFTA implementation, showa liberalization process in which protection is eliminated at a faster pacethan the average for the whole economy. 2003 artículo científico 1665-2045 https://www.redalyc.org/articulo.oa?id=32312202 en http://www.redalyc.org/revista.oa?id=323 Economía Mexicana. Nueva Época application/pdf Centro de Investigación y Docencia Económicas, A.C. Economía Mexicana. Nueva Época (México) Num.2 Vol.XII |
| format | Artículo científico |
| id | redalyc_32312202 |
| institution | Redalyc |
| language | en |
| publishDate | 2003 |
| publisher | Centro de Investigación y Docencia Económicas, A.C. |
| spellingShingle | Mexican manufacturing markups: procyclical behavior and the impact of trade liberalization Alejandro Castañeda Economía y Finanzas Mexico markups market power manufacturing sector trade liberalization Mexican manufacturing markups: procyclical behavior and the impact of trade liberalization Alejandro Castañeda Economía y Finanzas Mexico markups market power manufacturing sector trade liberalization This paper estimates the markup for the Mexican manufacturingsector to detect the impact of trade liberalization on market power. UsingHalls proposal that states that a procyclical Solow residual is an indicationof market power, this research estimates the markup for different periodsto detect the change in market power after trade liberalization wasimplemented. We account for the potential cyclical behavior of the markupby including procyclical variables that affect the markup. The data showsa markup that moves counter-cyclically. The evidence is consistent withtheoretical arguments advanced by Rotemberg and Saloner (1986). Wepool four-digit industries and obtain estimates of the markup for thewhole manufacturing sector. For the entire manufacturing sector, we findthat trade liberalization acts as a market disciplining device that reducesthe degree of market power. At the sector level, we find a significantreduction in market power in those sectors that experienced a strongliberalization process after the GATT negotiations. Also, those sectors thatshow a reduction in market power after the NAFTA implementation, showa liberalization process in which protection is eliminated at a faster pacethan the average for the whole economy. 2003 artículo científico 1665-2045 https://www.redalyc.org/articulo.oa?id=32312202 en http://www.redalyc.org/revista.oa?id=323 Economía Mexicana. Nueva Época application/pdf Centro de Investigación y Docencia Económicas, A.C. Economía Mexicana. Nueva Época (México) Num.2 Vol.XII |
| title | Mexican manufacturing markups: procyclical behavior and the impact of trade liberalization |
| topic | Economía y Finanzas Mexico markups market power manufacturing sector trade liberalization |
| url | https://www.redalyc.org/articulo.oa?id=32312202 |