Productivity Growth and Environmental Regulation in Mexican and U.S. Food Manufacturing

15 Pages Posted: 31 Mar 2020

See all articles by Ebru Alpay

Ebru Alpay

Oregon State University - Department of Economics

Joe Kerkvliet

Oregon State University

Steven Buccola

Oregon State University

Multiple version iconThere are 2 versions of this paper

Date Written: November 2002

Abstract

Many argued during the NAFTA debate that trade liberalization would favor Mexican over U.S. food processors, especially because of lax environmental laws south of the border. We find through an examination of profit functions that productivity growth in Mexico has outstripped that in the United States, suggesting free trade indeed will benefit Mexican suppliers. U.S. pollution regulations have had no impact on the profitability or productivity of U.S. food manufacturing. In contrast, Mexico's swiftly rising environmental standards have enhanced food processors' productivity growth, corroborating the Porter hypothesis. Pollution law, therefore, has favored Mexican over U.S. food processing, but for reasons few had anticipated.

Keywords: environmental regulations, food processing and manufacturing, Mexico, NAFTA, pollution abatement, productivity, F130, O130, Q110, Q170, Q280

Suggested Citation

Alpay, Ebru and Kerkvliet, Joe and Buccola, Steven, Productivity Growth and Environmental Regulation in Mexican and U.S. Food Manufacturing (November 2002). American Journal of Agricultural Economics, Vol. 84, Issue 4, pp. 887-901, 2002, Available at SSRN: https://ssrn.com/abstract=3564543 or http://dx.doi.org/10.1111/1467-8276.00041

Ebru Alpay (Contact Author)

Oregon State University - Department of Economics

Corvallis, OR 97331
United States

Joe Kerkvliet

Oregon State University

Bexell Hall 200
Corvallis, OR 97331
United States

Steven Buccola

Oregon State University

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