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Seoul Journal of Economics
[ Article ]
Seoul Journal of Economics - Vol. 32, No. 1, pp.83-106
ISSN: 1225-0279 (Print)
Print publication date 28 Feb 2019
Received 03 Jul 2018 Revised 12 Dec 2018 Accepted 30 Jan 2019

Globalization and the Scrambling Process of Catching Up in Mexico

Clemente Ruiz Durán
Clemente Ruiz Duran, Professor, Faculty of Economics, the National Autonomous University of Mexico, Mexico City, Mexico, Tel: +525554551515 ruizdc@unam.mx

JEL Classification: L00, F43, F6

Abstract

In the last 50 years, Mexico’s manufacturing growth has been fostered, although its competitiveness has relied on the low wage paradigm. In this article, the country’s immersion in globalization is analyzed, thereby departing from the effects derived by the oil crisis that forced the country to leave the trap of natural resources to generate productive value chains through the economic opening boosted by the General Agreement on Tariffs and Trade (GATT) and subsequently, by the North American Free Trade Agreement (NAFTA). Such economic opening allowed the development of global value chains through original equipment manufacturing in the automotive, electronics, pharmaceutical, and medical devices industries. However, this process has been characterized by low investment coefficients and scarce innovation compared with Korea, Malaysia and China, due to the lack of an institutional framework that could have promoted innovation to allow the country to overcome the middle-income trap.

Keywords:

Industrial policy, Global Value Chains, Catch-up, Mexico

Acknowledgments

I acknowledge the support of Elías Sosa Onofre for the systematization of information and statistical analysis and Joaquín Sánchez-Gómez for his ideas and proofreading.

A previous version of this paper was presented at the 2018 SJE Conference on Political Economy of the Middle-income Trap held in Seoul. The authors are grateful to the editor, referee, and participants for their beneficial comments and suggestions that led to the improvement of this paper.

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