The dynamics of Mexican manufacturing exports

Abstract

Thi s article evaluates several of the determinants of Mexican manufacturing exports, using two complementary econometric methods: a structural arima model, which makes it possible to estimate elasticities; and a generalized var model, which provides a fully dynamic perspective by estimating impulse response functions. As some of the findings are robust to changes in the econometric methodology used, the article reaches the following conclusions. First, manufacturing exports are positively related to labour productivity and external demand; so the adverse effects of an international recession on Mexican exports could, to some extent, be offset by raising worker productivity. Second, real exchange-rate depreciation does not increase manufacturing exports, but actually reduces them, at least in the short run. These findings are consistent with the idea that a real depreciation not only affects demand, but also generates strong supply-side effects. This article evaluates several of the variables that determine Mexico's manufacturing exports, using two complementary econometric methods: a structural Autoregressive Integrated Moving Average (arima) model to estimate elasticities; and a Generalized Vector Autoregressive (gvar) model, which makes it possible to estimate the dynamic responses of manufacturing exports to different types of shock. 1 Accordingly, both univariate and multivariate time series analyses are used to obtain two different perspectives on the factors driving manufacturing exports.Several previous empirical studies have shown that exports are influenced not only by relative prices and external demand, but also by domestic demand and supply-side factors. In that context, this paper concludes that increased labour productivity and external demand expansions both have a significant impact on the growth of manufactured exports. Moreover, the evidence provided here suggests that a real exchange-rate depreciation could reduce the volume of exports in the short term, rather than increase it. A plausible explanation for this atypical result is that real currency depreciation generates two opposing effects, especially in developing countries: it makes their exports cheaper in terms of foreignThe author gratefully acknowledges financial support for this research from the National Science and Technology Council (conacyt), and the comments and suggestions made by an anonymous referee. 1 The gvar method produces empirical evidence that is independent of the ordering of the equations, which is a major improvement over traditional recursive var models. currency; but it also raises the local-currency cost of imported intermediate inputs. The net effect on Mexico's international competitiveness appears to be negative, at least in the short term. Lastly, we present empirical results showing that strategic investment and production decisions are driven by the firm's desire to grow its exports.An important economic-policy implication of this is that the adverse effects of an international recession on Mexican exports...

Employment and accumulation of capital around the world: An econometric analysis

“…On the other hand, in ‘Time-series analysis’ section, equation (1) is estimated using a structural Autoregressive Integrated Moving Average (ARIMAX) model for five selected countries (United States, France, Japan, Mexico, and Turkey). According to Cuevas (2010):A structural ARIMA model can also be referred to as an ARIMAX (autoregressive integrated moving-average model with exogenous variables), since: (i) it differentiates the dependent variable (and the explanatory variables) by order of integration; (ii) it reflects a structural relation between the dependent and explanatory variables; and (iii) it includes autoregressive (AR) and moving-average (MA) terms to satisfactorily model the error process. (p. 154)…”

“…estimated using a structural Autoregressive Integrated Moving Average (ARIMAX) model for five selected countries (United States, France, Japan, Mexico, and Turkey). According to Cuevas (2010):…”

Determinantes y evolución entre precios y cantidades de las exportaciones industriales de Colombia: un estudio a partir de un modelo de Panel-VAR

“…) y Montes et. al (2008, 2010, encontraron que la mayor parte de los bienes que Colombia exportaba a Venezuela tenían condiciones especiales de venta, con precios superiores respecto al resto de mercados. Esto como resultado de la estructura de protección de la economía colombiana y del progresivo crecimiento económico venezolano causado por los altos precios del petróleo.…”

“…En otros trabajos se introduce la hipótesis de que los efectos de la tasa de cambio pueden ser contrarios a los esperados debido al efecto que la misma tiene sobre el costo de los insumos importados. Este es el caso de Cuevas (2011), quien demostró para México, que una depreciación reducía en el corto plazo las exportaciones industriales por el aumento en los costos de los insumos que esta induce. Sin embargo, otros autores como Leigh et al (2017), revisan estas elasticidades mediante un análisis de cointegración para varios países y, encuentran que la conexión entre la tasa de cambio y las exportaciones persiste y ha sido estable del tiempo.…”

“…Sin embargo, trabajos recientes plantean que los flujos de comercio exterior pueden estar desconectados de las tasas de cambio. Los canales por los cuales se produce esta desconexión se explican a partir de modelos microeconómicos en donde se tienen en cuenta la introducción de las firmas en las cadenas de valor global y el uso de insumos importados en la producción de bienes de exportación (Cuevas, 2010).…”