S-Space College of Social Sciences (사회과학대학) Institute of Economics Research (경제연구소) Seoul Journal of Economics Seoul Journal of Economics vol.32 no.1~4 (2019)
Globalization and the Scrambling Process of Catching Up in Mexico
- Durán, Clemente Ruiz
- Issue Date
- Seoul Journal of Economics, Vol.32 No.1, pp. 83-106
- A previous version of this paper was presented at the 2018 SJE Conference on Political Economy of the Middle-income Trap held in Seoul.
- In the last 50 years, Mexicos manufacturing growth has been fostered, although its competitiveness has relied on the low wage paradigm. In this article, the countrys 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.