How to Cite
Carrasco C. A., & Tovar-García E. D. (2019). Determinants of the Mexican Bilateral Trade Balance: Income, Exchange Rate and Exports Composition. Revista Finanzas y Política Económica, 11(2). https://doi.org/10.14718/RFYPE.2019.11.2.2203

Abstract

Using dynamic panel data models, we study the determinants of the Mexican bilateral trade balance with 39 trade partners from 1990 to 2016. The literature claims that income and real exchange rate are the key independent variables. Here, export composition is included as explanatory variable, previously neglected. Results differ from other researches: there is no robust evidence on the effect of income; there is evidence of the association between bilateral balance and real exchange rate; and there is a weak positive link with exports consisted of high-tech goods, partially explaining the persistent trade deficit of Mexico.

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