The 5th Prize Emilio Fontela on Input-Output Analysis 2017 has been awarded to J. Manuel García Ramos (National Autonomous University of Mexico) for the paper “Mapping and measuring the evolution of Argentina, Brasil, Colombia, Costa Rica, Chile and Mexico in the Global Value Chains, the case of manufacturing exports, 1995-2011“.
His paper fulfills not only the requirement necessary on scientific quality for the award of the prize but also contributes to the further knowledge on the research area followed. Therefore, the jury congratulates him for the high quality of the paper.
Abstract pf the paper awarded: “Mapping and measuring the evolution of Argentina, Brasil, Colombia, Costa Rica, Chile and Mexico in the Global Value Chains, the case of manufacturing exports, 1995-2011”
In the past few decades, the international fragmentation of production processes in some sectors (most prominently in manufacturing industries) has evolved rapidly. In 1995, manufacturing industry exports represented 60.5 per cent of the total world exports; meanwhile, in 2011, signified 56.1 per cent (OECD/WTO, 2016). The multiplicative effects of manufacturing exports are stronger than other sector’s: Its direct and indirect production processes increase the demand for raw materials, energy, construction, and services from a broad array of supplying industries (Manufacturing Institute et al., 2012).
In the context of Global Value Chains (GVC), a country cannot become or continue competitive without robust and well-organized backward and forward linkages. In this sense, any variation in the world demand for manufacturing exports of individual countries has direct and indirect impacts over the GVC. By viewing the GVC of manufacturing exports as an input-output system, and therefore in turn as a complex network, we map and measure the domestic, upstream, and downstream ripple effects of Argentina, Brasil, Colombia, Costa Rica, Chile, and Mexico’s exports over it from 1995 to 2011.
Our results show that, among Latin American countries, Mexico has the highest domestic, upstream, and downstream ripple effects. In 1995, an additional VA of $1.28 from Mexico and $0.6 from upstream processes of the rest of the world are required for a dollar of new final demand for Mexico’s exports of manufactures only. In 2011, an additional VA of $1.52 from Mexico and $0.92 from upstream processes of the rest of the world are required for a dollar of new final demand for Mexico’s exports of manufactures only.
However, Mexico has very weak ripple effects over the GVC of manufacturing exports because their backward and forward linkages are sparse. It seems that the starting point to increase the quantitative ripple effects of Mexico’s manufacturing exports over the GVC is developing its forward and backward linkages with Latina American countries. The development of the intra-regional market could be an effective strategy to facilitate productive diversification and international competitiveness. However, Latin American countries must develop interconnected and rigorous regulatory frameworks to reinforce regional integration and their response to the rest of world’s trade strategies.