The Participation of Mexico in Global Supply Chains: The Challenge of Adding Mexican Value
There is a general perception that Mexico's insertion in global supply chains has been mostly in assembly operations and that efforts should be made to incorporate additional domestic value in the international production networks in which the country participates. To examine this issue properly one needs to have a measure of the share of domestic value added that is effectively embodied in Mexico's exports. We analyze firm-level data from the IMMEX census which covers all the firms that benefit from the Maquiladora and the PITEX programs. We find that the share of domestic value added as a proportion of the firm's exports has been declining in the last 6 years. We show that the decline is not the result of market share re-allocations; that it persists after controlling for price changes and that is observed across firms of all sizes. The results suggest that more segments of the supply chains are generally not moving into Mexico and that on the contrary there is a trend of falling domestic value added. This result contrasts with that of other countries engaged in similar export processing activities, like China.
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| Format: | Technical Notes biblioteca |
| Language: | English |
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Inter-American Development Bank
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| Subjects: | Value Added, Export, F14 - Empirical Studies of Trade, F23 - Multinational Firms • International Business, L23 - Organization of Production, |
| Online Access: | http://dx.doi.org/10.18235/0009142 https://publications.iadb.org/en/participation-mexico-global-supply-chains-challenge-adding-mexican-value |
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