The impact of competition with China in the US market on innovation in Mexican manufacturing firms

Using data from 6378 Mexican firms for the 2012-2013 period, this paper estimates the effect of competition with China for the US market on the innovation efforts of the Mexican manufacturing sector. After controlling for the influence of several variables, we find a U-curve shaped relationship betw...

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Bibliographic Details
Published in:	Latin American economic review Vol. 28; no. 1; pp. 1 - 21
Main Authors:	Meza González, Liliana, Sepulveda, Jaime Marie
Format:	Journal Article
Language:	English
Published:	Heidelberg Springer 29-05-2019 Springer Berlin Heidelberg Economica
Subjects:	Boating industry Companies Competition Developing country Development Economics Economic Policy Economics Economics and Finance Educational Policy and Politics Environmental Economics Escape Foreign competition Innovations Labor Economics Manufacturing Manufacturing sector Market shares Regional/Spatial Science Research Article Technological innovation United States > US China F6 Technological innovation O3 Manufacturing sector O5 Developing country Foreign competition L6
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Summary:	Using data from 6378 Mexican firms for the 2012-2013 period, this paper estimates the effect of competition with China for the US market on the innovation efforts of the Mexican manufacturing sector. After controlling for the influence of several variables, we find a U-curve shaped relationship between foreign competition (measured by the China effect) and the innovation of Mexican manufacturing firms in products, in processes, and for the world. Given that the quadratic positive effect is much larger than the negative linear effect, we conclude that an Escape-Competition effect dominates when Mexican firms are fighting for a larger market share with China in the US.
ISSN:	2196-436X 2198-3526 2196-436X
DOI:	10.1186/s40503-019-0067-3