Revealed comparative advantages and intra-industry trade changes between Mexico, China and the USA

Abstract

The USA is the main trading partner of Mexico; however, Chinese exports to Mexico have increased their role in the international trade of the Mexican economy. The main exports from Mexico to the USA are based on intra-industry trade and are concentrated in the automobile industry and telecommunications. Mexican exports to China principally consist of inter-industrial trade and are related to comparative advantages and factor endowments and also, to a lesser extent, on intra-industry trade. The specialization of the Mexican exporting sector in the automobile and electronic industries has created comparative advantages revea.led in the Mexican economy. A robust least squares model was estimated which suggest that revealed comparative advantages and the pull effect of trading partners have a positive impact on intra-industry trade.

Keywords

• International trade
• China and Mexico Trade
• Intra-industry trade
• Mexican exports
• revealed comparative advantage