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Papers by Maritza Sotomayor

Global Manufacturing Production: An Analysis and Determinants for Mexico's Trade in Value-Added, 2020

Mexico's participation in the global manufacturing production began with the in-bond or maquilado... more Mexico's participation in the global manufacturing production began with the in-bond or maquiladora industry in the mid-60s. Since then, the manufacturing industry has positioned itself in the Global Value Chains (GVCs). However, the analysis of foreign trade in global manufacturing production requires a different measurement that accounts for trade in value-added. In this article, we examine the global manufacturing production as well as the determining factors of trade in value-added for the 2003-2018 period. This analysis becomes relevant for designing an industrial policy focused on improving Mexico's participation in the creation of added value linked to GVC. We corroborate the significance of the U.S. industrial activity as a determinant of the trade in value-added. The Mexican industrial activity becomes a significant determinant as well as the gross fixed capital formation. However, we found that traditional variables, such as foreign direct investment, are not significant. These results led us to believe that more efforts in constructing a theoretical framework are needed to explain the trade in value-added.

21st Century Economics: A Reference Handbook

AD-minister

This article examines the debate regarding regional integration and Global Value Chains (GVCs) in... more This article examines the debate regarding regional integration and Global Value Chains (GVCs) in Latin America, and the challenges and opportunities that a deepening integration would have for exporting firms. The Latin American region had been progressively taking part in these integrated economic systems when COVID 19 hit. The pandemic has exposed weaknesses in its participation due to several factors, including its dependence on extra-regional hubs. Nevertheless, the disruption has brought back the need to consider the advantages of Latin American GVCs that could enhance the resilience and performance of regional firms. The review shows various benefits in carrying out a regional integration that is GVCs-oriented, similar to Asian and European countries. However, achieving the same level of regional GVC is not without challenges for firms, governments, and institutions. This article examines these alternatives in the context of an economic and health crisis.

Mexico's participation in the global manufacturing production began with the in-bond or maqui... more Mexico's participation in the global manufacturing production began with the in-bond or maquiladora industry in the mid-60s. Since then, the manufacturing industry has positioned itself in the Global Value Chains (GVCs). However, the analysis of foreign trade in global manufacturing production requires a different measurement that accounts for trade in value-added. In this article, we examine the global manufacturing production as well as the determining factors of trade in value-added for the 2003-2018 period. This analysis becomes relevant for designing an industrial policy focused on improving Mexico's participation in the creation of added value linked to GVC. We corroborate the significance of the U.S. industrial activity as a determinant of the trade in value-added. The Mexican industrial activity becomes a significant determinant as well as the gross fixed capital formation. However, we found that traditional variables, such as foreign direct investment, are not signi...

This paper empirically examines the influencing role of internal and external factors on the infl... more This paper empirically examines the influencing role of internal and external factors on the inflation rate for two emerging economies, Egypt and Mexico. We develop an augmented version of the monetarist model, where the model is estimated using quarterly data for Egypt for the period 1975Q1-2015Q4 and Mexico for the period 1976Q1-2015Q4. For the long-run estimation, we apply the Johansen-Juselius Maximum Likelihood estimation, as well as the Fully Modified Ordinary Least Squares methods. According to our estimation results, the price level over the long-run is affected by both internal and external factors in both countries. It is ascertained that both the monetary policy measured by supply of money and interest rate, and the fiscal policy measured by government expenditure, deficit and debt, affect the price level over the long-run in both countries. Consequently, both policies can be used to fight inflation over the long-run in these two countries. Furthermore, both the United St...

Frontiers of Economics in China, 2019

Foreign direct investment (FDI) and foreign remittance have been the main sources of external cap... more Foreign direct investment (FDI) and foreign remittance have been the main sources of external capital inflows for many developing countries. FDI has been credited as the main driver of rapid economic growth in many Asian countries/regions in recent decades. However, this effect of FDI on long-run economic growth has not been observed in Latin American countries. Now, the question is whether FDI and an increase in foreign remittances in the past two decades have achieved expected positive results in terms of economic growth for emerging economies. This study uses a generalized method of moments (GMM) dynamic panel model to quantify the impacts of FDI and foreign remittances as sources of foreign capital for Asia and Latin America. Our findings suggest that FDI and remittances perform differently in different regions in terms of their impacts on GDP growth. Countries that have specific policies (i.e., industrial policy, domestic content requirement, and export production targets) for ...

This paper reviews the trade performance for Latin American countries for the new millennium. The... more This paper reviews the trade performance for Latin American countries for the new millennium. There have been significant changes for these countries since they started a trade liberalization process in the nineties. Although the trade’s openness process has been different for each country, it is still possible to study the region as a whole. In order to point out this transformation this paper starts with the main trade policies of the nineties, discussing how the trade structure has changed from being mostly based on exports of primary products to being based on manufacturing exports. Another significant element in Latin America’s trade has been the growing presence of China as one of the main partners for several of these countries. In some cases, the economic growth of these countries has been explained by the exports to China. Finally, the paper reviews some aspects of the latest international financial crisis impact over Latin American countries. A reduction of their economic ...

Economic and Business Review, 2020

This paper empirically examines the influencing role of internal and external factors on the infl... more This paper empirically examines the influencing role of internal and external factors on the inflation rate for two emerging economies, Egypt and Mexico. We develop an augmented version of the monetarist model, where the model is estimated using quarterly data for Egypt for the period 1975Q1-2015Q4 and Mexico for the period 1976Q1-2015Q4. For the long-run estimation, we apply the Johansen-Juselius Maximum Likelihood estimation, as well as the Fully Modified Ordinary Least Squares methods. According to our estimation results, the price level over the long-run is affected by both internal and external factors in both countries. It is ascertained that both the monetary policy measured by supply of money and interest rate, and the fiscal policy measured by government expenditure, deficit and debt, affect the price level over the long-run in both countries. Consequently, both policies can be used to fight inflation over the long-run in these two countries. Furthermore, both the United States interest rate and price affect the price level with the same sign in both studied countries over the long-run. However, over the short-run, where it is expected that the United States price affects the price in Mexico, it in fact does not have any effect on the prices in Egypt.

Investigación Económica, 2013

El propósito de este artículo es la medición de los índices bilaterales de comercio intraindustri... more El propósito de este artículo es la medición de los índices bilaterales de comercio intraindustrial de la industria manufacturera no maquiladora de México en el marco del Tratado de Libre Comercio de América del Norte (TLCAN) para período 1994-2006. En este trabajo se sostiene la pertinencia de aislar el contenido del componente maquilador de los flujos de comercio exterior, ya que éste corresponde a un intercambio de bienes en diversas etapas de producción, mientras que el comercio intraindustrial se analiza y cuantifica como el comercio de bienes que pertenecen a una misma etapa productiva. Asimismo, se estiman los índices de comercio intraindustrial marginales y se verifica si el TLCAN ha sido útil para fomentar un comercio de doble vía. En ese entendido, se ofrece una medición ajustada de los índices considerando además la diferenciación respecto de su naturaleza horizontal y vertical. Se comprueba que el comercio bilateral mexicano ha sido básicamente vertical y se ha concentra...

International Journal of Business and Social Research, 2016

This paper surveys Vertical Specialization (VS) from different empirical approaches, including th... more This paper surveys Vertical Specialization (VS) from different empirical approaches, including the various conceptualizations of VS, the problems with its quantification, and a case study. The empirical estimation of this paper refers to the Mexican manufacturing industry and the in-bond industry (also known as maquiladora). The purpose of this paper is to compare VS, through the application of the Vertical Intra-Industry Trade (VIIT) indexes, for maquiladora and non-maquiladora industries and to contrast the degree to which the maquiladora industry is integrated with the global value chain relative to the non-maquiladora activities for the 1994-2006 period. Furthermore, this paper quantifies VIIT for the post-maquiladora period (2007-2014) in order to discuss if there have been changes in the VIIT since the conclusion of the maquiladora program in 2006. In particular, this paper tests if the quality ladder hypothesis applies to Mexico for its bilateral trade with the United States and Canada. The empirical estimations show the remarkable differences between maquiladora and nonmaquiladora VS and the impacts that changes in the NAFTA tariff schedule for the automotive industry have had on the bilateral trade pattern.

Investigacion Economica, Jun 1, 2009

Global Economy Journal, 2016

We developed a theoretical model capable to analyze U.S. fiscal and monetary policy effects on Me... more We developed a theoretical model capable to analyze U.S. fiscal and monetary policy effects on Mexican exports in order to provide an alternative approach to the study of economic interdependence. The model was estimated for the sample period of 1980–2013. The existing literature evidences quantified interdependence through trade flows and ignores the role of the U.S. fiscal and monetary policies. This paper uses the concept of sensitivity, from the economic interdependence literature, to verify the long and short run relationships between the U.S. and Mexico in a context of trade integration. Our findings confirm Mexico’s sensitivity to unanticipated shocks in particular coming from the U.S. monetary policy, the exchange rate and the world oil price.

Norteamérica, 2014

Proyecto académico sin fines de lucro, desarrollado bajo la iniciativa de acceso abierto

Global Manufacturing Production: An Analysis and Determinants for Mexico's Trade in Value-Added, 2020

Mexico's participation in the global manufacturing production began with the in-bond or maquilado... more Mexico's participation in the global manufacturing production began with the in-bond or maquiladora industry in the mid-60s. Since then, the manufacturing industry has positioned itself in the Global Value Chains (GVCs). However, the analysis of foreign trade in global manufacturing production requires a different measurement that accounts for trade in value-added. In this article, we examine the global manufacturing production as well as the determining factors of trade in value-added for the 2003-2018 period. This analysis becomes relevant for designing an industrial policy focused on improving Mexico's participation in the creation of added value linked to GVC. We corroborate the significance of the U.S. industrial activity as a determinant of the trade in value-added. The Mexican industrial activity becomes a significant determinant as well as the gross fixed capital formation. However, we found that traditional variables, such as foreign direct investment, are not significant. These results led us to believe that more efforts in constructing a theoretical framework are needed to explain the trade in value-added.

21st Century Economics: A Reference Handbook

AD-minister

This article examines the debate regarding regional integration and Global Value Chains (GVCs) in... more This article examines the debate regarding regional integration and Global Value Chains (GVCs) in Latin America, and the challenges and opportunities that a deepening integration would have for exporting firms. The Latin American region had been progressively taking part in these integrated economic systems when COVID 19 hit. The pandemic has exposed weaknesses in its participation due to several factors, including its dependence on extra-regional hubs. Nevertheless, the disruption has brought back the need to consider the advantages of Latin American GVCs that could enhance the resilience and performance of regional firms. The review shows various benefits in carrying out a regional integration that is GVCs-oriented, similar to Asian and European countries. However, achieving the same level of regional GVC is not without challenges for firms, governments, and institutions. This article examines these alternatives in the context of an economic and health crisis.

Mexico's participation in the global manufacturing production began with the in-bond or maqui... more Mexico's participation in the global manufacturing production began with the in-bond or maquiladora industry in the mid-60s. Since then, the manufacturing industry has positioned itself in the Global Value Chains (GVCs). However, the analysis of foreign trade in global manufacturing production requires a different measurement that accounts for trade in value-added. In this article, we examine the global manufacturing production as well as the determining factors of trade in value-added for the 2003-2018 period. This analysis becomes relevant for designing an industrial policy focused on improving Mexico's participation in the creation of added value linked to GVC. We corroborate the significance of the U.S. industrial activity as a determinant of the trade in value-added. The Mexican industrial activity becomes a significant determinant as well as the gross fixed capital formation. However, we found that traditional variables, such as foreign direct investment, are not signi...

This paper empirically examines the influencing role of internal and external factors on the infl... more This paper empirically examines the influencing role of internal and external factors on the inflation rate for two emerging economies, Egypt and Mexico. We develop an augmented version of the monetarist model, where the model is estimated using quarterly data for Egypt for the period 1975Q1-2015Q4 and Mexico for the period 1976Q1-2015Q4. For the long-run estimation, we apply the Johansen-Juselius Maximum Likelihood estimation, as well as the Fully Modified Ordinary Least Squares methods. According to our estimation results, the price level over the long-run is affected by both internal and external factors in both countries. It is ascertained that both the monetary policy measured by supply of money and interest rate, and the fiscal policy measured by government expenditure, deficit and debt, affect the price level over the long-run in both countries. Consequently, both policies can be used to fight inflation over the long-run in these two countries. Furthermore, both the United St...

Frontiers of Economics in China, 2019

Foreign direct investment (FDI) and foreign remittance have been the main sources of external cap... more Foreign direct investment (FDI) and foreign remittance have been the main sources of external capital inflows for many developing countries. FDI has been credited as the main driver of rapid economic growth in many Asian countries/regions in recent decades. However, this effect of FDI on long-run economic growth has not been observed in Latin American countries. Now, the question is whether FDI and an increase in foreign remittances in the past two decades have achieved expected positive results in terms of economic growth for emerging economies. This study uses a generalized method of moments (GMM) dynamic panel model to quantify the impacts of FDI and foreign remittances as sources of foreign capital for Asia and Latin America. Our findings suggest that FDI and remittances perform differently in different regions in terms of their impacts on GDP growth. Countries that have specific policies (i.e., industrial policy, domestic content requirement, and export production targets) for ...

This paper reviews the trade performance for Latin American countries for the new millennium. The... more This paper reviews the trade performance for Latin American countries for the new millennium. There have been significant changes for these countries since they started a trade liberalization process in the nineties. Although the trade’s openness process has been different for each country, it is still possible to study the region as a whole. In order to point out this transformation this paper starts with the main trade policies of the nineties, discussing how the trade structure has changed from being mostly based on exports of primary products to being based on manufacturing exports. Another significant element in Latin America’s trade has been the growing presence of China as one of the main partners for several of these countries. In some cases, the economic growth of these countries has been explained by the exports to China. Finally, the paper reviews some aspects of the latest international financial crisis impact over Latin American countries. A reduction of their economic ...

Economic and Business Review, 2020

This paper empirically examines the influencing role of internal and external factors on the infl... more This paper empirically examines the influencing role of internal and external factors on the inflation rate for two emerging economies, Egypt and Mexico. We develop an augmented version of the monetarist model, where the model is estimated using quarterly data for Egypt for the period 1975Q1-2015Q4 and Mexico for the period 1976Q1-2015Q4. For the long-run estimation, we apply the Johansen-Juselius Maximum Likelihood estimation, as well as the Fully Modified Ordinary Least Squares methods. According to our estimation results, the price level over the long-run is affected by both internal and external factors in both countries. It is ascertained that both the monetary policy measured by supply of money and interest rate, and the fiscal policy measured by government expenditure, deficit and debt, affect the price level over the long-run in both countries. Consequently, both policies can be used to fight inflation over the long-run in these two countries. Furthermore, both the United States interest rate and price affect the price level with the same sign in both studied countries over the long-run. However, over the short-run, where it is expected that the United States price affects the price in Mexico, it in fact does not have any effect on the prices in Egypt.

Investigación Económica, 2013

El propósito de este artículo es la medición de los índices bilaterales de comercio intraindustri... more El propósito de este artículo es la medición de los índices bilaterales de comercio intraindustrial de la industria manufacturera no maquiladora de México en el marco del Tratado de Libre Comercio de América del Norte (TLCAN) para período 1994-2006. En este trabajo se sostiene la pertinencia de aislar el contenido del componente maquilador de los flujos de comercio exterior, ya que éste corresponde a un intercambio de bienes en diversas etapas de producción, mientras que el comercio intraindustrial se analiza y cuantifica como el comercio de bienes que pertenecen a una misma etapa productiva. Asimismo, se estiman los índices de comercio intraindustrial marginales y se verifica si el TLCAN ha sido útil para fomentar un comercio de doble vía. En ese entendido, se ofrece una medición ajustada de los índices considerando además la diferenciación respecto de su naturaleza horizontal y vertical. Se comprueba que el comercio bilateral mexicano ha sido básicamente vertical y se ha concentra...

International Journal of Business and Social Research, 2016

This paper surveys Vertical Specialization (VS) from different empirical approaches, including th... more This paper surveys Vertical Specialization (VS) from different empirical approaches, including the various conceptualizations of VS, the problems with its quantification, and a case study. The empirical estimation of this paper refers to the Mexican manufacturing industry and the in-bond industry (also known as maquiladora). The purpose of this paper is to compare VS, through the application of the Vertical Intra-Industry Trade (VIIT) indexes, for maquiladora and non-maquiladora industries and to contrast the degree to which the maquiladora industry is integrated with the global value chain relative to the non-maquiladora activities for the 1994-2006 period. Furthermore, this paper quantifies VIIT for the post-maquiladora period (2007-2014) in order to discuss if there have been changes in the VIIT since the conclusion of the maquiladora program in 2006. In particular, this paper tests if the quality ladder hypothesis applies to Mexico for its bilateral trade with the United States and Canada. The empirical estimations show the remarkable differences between maquiladora and nonmaquiladora VS and the impacts that changes in the NAFTA tariff schedule for the automotive industry have had on the bilateral trade pattern.

Investigacion Economica, Jun 1, 2009

Global Economy Journal, 2016

We developed a theoretical model capable to analyze U.S. fiscal and monetary policy effects on Me... more We developed a theoretical model capable to analyze U.S. fiscal and monetary policy effects on Mexican exports in order to provide an alternative approach to the study of economic interdependence. The model was estimated for the sample period of 1980–2013. The existing literature evidences quantified interdependence through trade flows and ignores the role of the U.S. fiscal and monetary policies. This paper uses the concept of sensitivity, from the economic interdependence literature, to verify the long and short run relationships between the U.S. and Mexico in a context of trade integration. Our findings confirm Mexico’s sensitivity to unanticipated shocks in particular coming from the U.S. monetary policy, the exchange rate and the world oil price.

Norteamérica, 2014

Proyecto académico sin fines de lucro, desarrollado bajo la iniciativa de acceso abierto