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Title page
Contents
Abstract 4
Résumé 4
Introduction 6
Recent developments in Mexico's participation in global value chains 6
GVCs Data 7
Main features of Mexico's GVC participation and recent trends 8
Drivers of forward participation in GVCs 12
Literature review 13
Methodology 14
Results 15
Conclusions 20
References 21
Annex A 24
Table 1. Determinants of GVC participation: a gravity estimation 16
Table 2. Determinants of forward GVC participation 18
Table 3. Determinants of GVCs participation: interactions with country-specific variables 19
Figure 1. Mexico is benefiting from ongoing changes in global value chains 7
Figure 2. Mexican total participation in GVC is high and increasing 8
Figure 3. Mexican backward participation in GVCs is high and increasing 9
Figure 4. Forward participation in global value chain remains low 9
Figure 5. Mexico's GVC participation is concentrated in manufacturing 10
Figure 6. Recent changes in services forward participation tend to be small 10
Figure 7. The US import share moves from China to alternative source countries 11
Figure 8. Mexico's GVCs linkages with China have gradually increased 11
Figure 9. Mexico's GVC participation is more skewed towards North America 12
Figure 10. The dependence of Mexico's exports on inputs from China and the United States has increased 12
Figure 11. Forward participation is positively related to productivity growth 13
Annex Tables
Table A A.1. Descriptive statistics of main variables 24
Table A A.2. Robustness analysis with TIVA dataset 25
Table A A.3. Robustness analysis with TIVA dataset 26
Table A A.4. Robustness analysis - Gravity estimations with interactions between country-specific variables and international border 27
Annex Figures
Figure A A.1. Breakdown of exports in terms of value-added 24
Figure A A.2. Mexico's gap to the predicted GVC forward participation shows untapped potential 28
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