Comparative Advantage and the Performance of Mexican Manufacturing Exports during 1996-2005.

In this paper we identify Mexico’s pattern of revealed comparative advantages within manufacturing trade flows during the 1996-2005 period. We define a basket of competing countries, according to the degree of similarity of each country’s comparative advantage pattern with that of Mexico. We show that revealed comparative advantages seem to be positively correlated with the relative performance of Mexico’s manufacturing exports to the U.S. market, as measured by the increase in Mexico’s market share relative to that of its competitors. The analysis suggests that the increasing presence in the markets of countries with similar characteristics as Mexico, in particular from 2001 on, might be causing Mexico to lose comparative advantage in some products in which it had specialized in during the previous years.