Cost and Relative Price Competitiveness of the Mexican Manufacturing Industry in the U.S. Market.

This research evaluates the long-term determinants of Mexican manufacturing competitiveness in the U.S. market. To perform this task, an International Competitiveness (IC) index is constructed and then a model is specified and estimated by using three different econometric methods. The empirical evidence across econometric techniques is consistent in indicating that IC is responsive to the peso-dollar real exchange rate, the yuan-dollar real exchange rate, labor productivity, wages, and the cost of credit. An important contribution of this paper is to show that manufacturing IC is influenced by the yuan-dollar real exchange rate and the real cost of credit. [ABSTRACT FROM AUTHOR]