Integration into Global Value Chains : evidence from Mexico, 1995-2020

This paper examines Mexico's integration into Global Value Chains (GVCs) and its implications for structural change over the period 1995-2020. Using a multiregional input-output framework, the analysis decomposes gross exports into domestic and foreign value added and combines these indicators with weighted forward and backward production linkages to assess the relationship between sectoral GVC participation patterns and sectors' roles within the domestic production structure. The results show that Mexico's integration into GVCs has been characterized by strong and persistent backward participation, reflecting a high dependence on imported intermediate inputs, alongside comparatively lower and more stable forward participation. Multi-stage integration has been particularly relevant in a limited number of manufacturing activities-most notably in the automotive sector-both in terms of its contribution to domestic value added and its dynamism. However, this form of integration has remained highly concentrated, and changes in sectoral GVC participation have not translated into generalized shifts in the dynamic hierarchy of sectors. Sectoral roles within the production structure exhibit a high degree of persistence over time, with only a small number of nongeneralized cases of upgrading. By jointly examining GVC participation typologies and sectoral linkage dynamics, the paper contributes to bridging trade-in-value-added analyses and structuralist approaches to productive change. From a policy perspective, while the results do not establish causal relationships, they point to differentiated structural patterns with relevant implications for industrial policy. Overall, the analysis suggests that deeper integration into GVCs, in the absence of targeted industrial policies, does not by itself guarantee structural transformation or sustained gains in domestic value added.