The fragmentation of production chains across borders has been one of the most distinctive features of globalization since the 1980s. Nonetheless, our understanding of its implications for trade theory and policy is only in its infancy. We suggest that trade in value added should follow theories...

This paper studies whether NAFTA contributed to the productivity convergence between Mexico and the US. Using data from the manufacturing sector for 1986 to 2000 and introducing a number of refinements in the computation of the total factor productivity and estimation methods, it shows that the...