Trade liberalization and openness tend to increase regional inequalities, especially in developing economies, where infrastructure and institutions are immature. Trade-induced inequalities often deteriorate into horizontal inequality across demographic groups and result in the peripheralization of the disadvantaged. This study aims to assess the impact of trade openness on Mexico's indigenous peoples using a difference-in-differences regression analysis framework. We show that Mexico's indigenous peoples have experienced significant disadvantages regarding employment opportunities and economic productivity (measured by gross value added) compared to their nonindigenous counterparts under the North American Free Trade Agreement. We conclude by discussing the relevant implications for policy design to address the disparity.

This article addresses Mexico's present situation in the lithium industry and its near future, ceteris paribus. Mexico's short-and long-term lithium supply will not improve by the exploration and exploitation planned by the nationalistic objectives of the current government. This analysis demonstrates that significant changes must be made to Mexico's energy policy to promote the development of lithium due to five risks: manufacturing capacity, misaligned incentives, industrial policies, geographic concentration, and limited international coordination. Therefore, although the world's largest lithium mine was found in Sonora in 2019, Mexico's policy approaches to nationalize lithium exploration and exploitation will not allow the country to capitalize on the boom of this industry, as happened in Bolivia. In the short term, Mexico's policies will create an exploration deficit due to the country's lack of know-how and investment. Thus, Mexico will not extract lithium in the long term nor benefit from the demand increase and development of a value chain, especially in North America. Given these risks, this article postulates that Mexico's lithium policy should be revised to open its market to foreign investment and use this nascent market to a good advantage.

This article addresses the risks and uncertainties for Mexico derived from the excessive dependency on US natural gas. It will take as a reference Btu price fluctuation and the covenants contained on the based contract for sale and purchase of natural gas, particularly in the context of the behaviour displayed by market participants (including governments) during the recent winter storm energy crisis in Texas which consequently forced shortages in Mexico due to a lack of 'available' natural gas to produce power (electricity). The research question includes: Should Mexico exploit its vast natural gas resources although it might not be a sustainable or a cost-effective (economically-socially and environmentally) decision? (The curse of the TEX-MEX-NG). Or instead, would it be better to prepare (within the limits of its financial situation) to address the US natural gas price fluctuations, like price hedging? Or a combination of both?

This paper investigates the causal relationship between competition and firm innovation and the impact of competition on firm productivity in the Mexican manufacturing sector. We use the analytical framework proposed by Aghion et al. (2005) and evaluate their central hypothesis. We use firm-level data from the Mexican manufacturing survey over the period 2009-2017. Our results show a negative linear relationship between competition and the intensity of firm innovation investment. These results are primarily due to the substantial technological disparity that exists across firms within sectors, where most firms compete very far from the leaders.

This commentary outlines the role of the economics approach in studying international borders and border regions. The discussion focuses on several key research areas related to international borders: international trade, border enforcement and immigration, border economy, border development and entrepreneurship, and border environment and geography. We briefy review the state of research in each area and identify directions for future research. The existing literature tends to approach border-related issues from social and political perspectives. Much of that research treats individual countries as a whole rarely concerning the distributional efects within a country. Instead of embedding border areas as something implicit, future research should explore the role of international borders and their existence more explicitly.

This study employs the synthetic control method (SCM) to estimate the economic effects of signing free trade agreements (FTAs) with the United States. This method allows for a counterfactual -the country's per capita GDP had it not signed a FTA-, which can be compared with the observed per capita GDP. This difference speaks to the causal impact of the FTA. We principally find that FTAs seem to have a heterogeneous impact. In particular, there is evidence that signing a FTA with the U.S. had a positive impact on Chile and Jordan's per capita GDP and that NAFTA harmed Mexico's per capita GDP. In several other cases, no significant economic impact is discernible. Besides, the more a country depends on the U.S. for its trade, the less beneficial signing a FTA with the U.S. is. This article contributes to the debate on the effectiveness of trade as a development strategy. In particular, the SCM opens up the possibility of a case-by-case analysis, ultimately revealing that a FTA with the U.S.-a country situated at the world's technology frontier-has heterogeneous outcomes and, by itself, does not guarantee economic development (obtained through a higher per capita GDP).

Continental integration processes can alter traditional development axes. Paelinck and Polese ' s work in 1999 explains that in the case of Mexico there is a tension between the U.S. border and the rest of the country: Mexico ' s integration in the NAFTA should have reduced the U.S. border attraction, extending the growth to territories located between this border and Mexico City. To test this hypothesis, we propose a spatial conditional beta-convergence model that uses as regressors both the distances to the U.S. border and to Mexico City, together with other control variables. This model is applied to the period from 1980 to 2008 using GVA at the municipality level. Working with municipal-level data allows to observe convergence patterns across space and identify the effects of location. The time-span studied distinguishes between before and after NAFTA. Estimates based on Mundlak ' s approach were obtained for time-invariant regressors. Results show that during the pre-NAFTA period there was a general process of convergence, but it is mainly explained by the faster growth of municipalities located near to the U.S. border. However, post-NAFTA, convergence in municipalities disappeared and the effect of distance to the U.S. border reversed its sign, as predicted in Paelinck and Polese ' s model.

This work evaluates the impact of productive specialization on the technical efficiency of the automotive industry in Mexico (1988-2008), using the production-possibility frontier method on a regional scale and considering its regional localization. To this end, an index of regional specialization in said sector was calculated, in addition to a technical efficiency index for the automotive industry using the stochastic frontier model (Battese and Coelli, 1995). The findings that were obtained suggest that specialization has a positive impact on productive efficiency in the units of analysis, and further, demonstrate that education levels and the localization of automotive plants in the northern and central regions of the country contribute to decreasing levels of productive inefficiency.

Trade facilitates growth in some regions of a country while shrinking others, and therefore to benefit from trade, labour may need to be able to migrate. This mobility is particularly crucial in a developing country with high income inequality like Mexico. We seek to answer the following questions: What characteristics facilitate or hinder that internal migration? Has trade liberalization changed the pattern of internal migration in Mexico? We first predict regional economic growth resulting from changes in Mexico-US tariffs by sector. We find that trade liberalization appears to have largely benefited the manufacturing sector. Next, using a spatial gravity model of migration, we find that while economic growth from trade openness drew workers to urban regions in the northern Border States of Mexico, much of the trade-driven migration occurred before NAFTA. Second, contrary to popular belief, migration from largely rural states appears to have decreased since NAFTA. We also find evidence that migration to the United States increased after NAFTA. Last, we find that income disparity in both the destination and origin region deters migration and that this effect increases after NAFTA. Thus, we see evidence that within-region income disparity can hinder migration, potentially exacerbating income disparity among regions.

Since Roback's seminal work (J Polit Econ 90(6):1257-1278, 1982), the literature on hedonic prices has evaluated the role of amenities in equilibrating regional differentials in nominal wages and prices. While these studies generally find evidence for traditional amenities and disamenities in developed countries, there remains little research on how characteristics such as violence affect the equilibrium in less developed countries. This article explores violence and other local characteristics as an amenity or disamenity for Mexico and employs the hedonic wage and rent theory proposed by Roback. This research uses a multilevel estimation technique using data from the Mexican Household Income and Expenditure Survey, along with other information from the municipal and state levels. This article finds evidence to suggest that illegal earning opportunities outweigh crime disamenity by inhabitants of some traditional drug-trafficking regions, because such crime appears to be the modus vivendi in those regions in a way that does not reduce economic performance.

Con una población total de alrededor de 450 millones juntos, México y Estados Unidos consumen una gran cantidad de energía anualmente; ejemplo de ello es que, en el 2018, EE. UU. consumió alrededor de 101 billones de BTUs de energía, mientras que México aproximadamente de 8 billones de BTUs. De acuerdo con la Administración de Información Energética (EIA) de EE. UU., una parte sustancial de esta demanda se satisface con petróleo y gas natural. Ahora bien, por el lado de la oferta, el panorama energético es muy diferente. Si bien Estados Unidos se convertió en un exportador neto de energía en los últimos años después de un aumento en la producción desde mediados de la década del 2000 (Figura 1, panel izquierdo), México, al contrario, se estableció como un importador de energía, siendo justamente Estados Unidos su principal socio comercial (Figura 1, panel derecho). La dependencia energética de México en la importación de gas natural puede revelarse a través de la dinámica de los precios del gas natural. Como muestra el panel izquierdo de la Figura 2, la volatilidad del precio minorista interno de México sigue de cerca la del precio de exportación de los Estados Unidos a México. Además, la necesidad de importación de gas natural en México se ha ido acrecentando a medida que la producción nacional se estanca y aumenta la demanda, particularmente en el sector eléctrico . México ha estado importando la mayor parte de su suministro de gas natural de los Estados Unidos (Figura 2, panel derecho). Las consecuencias de una tendencia tan creciente en México son poco claras e investigadas. Algunos estudios han explorado este tema desde la perspectiva de la independencia y seguridad energética de México . Dentro del espectro abarcado en la investigación de este estudio, no hay estudios que, desde la perspectiva de México, examinen sistemáticamente los impactos socioeconómicos del creciente comercio de gas natural entre Estados Unidos y México. Con el reciente cambio de administración y la posible desaceleración en el proceso de reforma energética, el papel del sector energético en la economía de México ha estado en debate . El objetivo de este documento es examinar el impacto del creciente comercio de gas natural entre Estados Unidos y el mismo. El enfoque se centra en la última década, que corresponde principalmente a la administración Peña-Nieto (2012-2018), durante la cual se desarrolló la mayor parte de la liberalización del mercado en el sector energético.

One relatively frequent limitation for empirical economics is the lack of data available at an appropriate spatial scale. Although the target, in principle, would be to work at a smaller geographical scale, the non-availability of geographically disaggregated information usually limits the conclusions of the analysis at an aggregate level. To overcome this problem, a process of Ecological Inference (EI) is required in order to recover the information at the required spatial scale.