Firm network transformation after trade liberalization: The case of Mexican manufacturing

Guillermo Abdel Musik Asali, University of Pennsylvania

Abstract

Successful manufacturing firms characteristically develop stable relationships with suppliers, regulators, customers and even competitors. Management and economic literature have used the concept of networks to describe these relationships, and have increasingly acknowledged the importance of these linkages in the development of firms and regions. However, firm networks are not static: changes in regulation and market structure will result in firms reconfiguring their relations to adapt to their new operating environment. Trade liberalization is one change which will have a particularly important impact by expanding the set of potential suppliers, customers and competitors. The purpose of this dissertation is to analyze the impact of trade liberalization on a firm's network of relations. The study concentrates on the case of Mexican manufacturing, and uses data collected from over 130 firm interviews during the recent transition from import substitution to export promotion. Results show that trade liberalization has had an important impact on the structure of firm relationships. Specifically: (a) The role of MNFs and domestic firms within the Mexican economy is changing, as are the relationships between them. (b) Sourcing and distribution behavior for different types of firms in different regions is converging, and (c) Firms are increasingly meeting and talking with other firms as a way of acquiring knowledge. These meetings have a very significant positive impact on a firm's productivity.

Subject Area

Urban planning|Area planning & development|Economics

Recommended Citation

Asali, Guillermo Abdel Musik, "Firm network transformation after trade liberalization: The case of Mexican manufacturing" (1996). Dissertations available from ProQuest. AAI9627877.
https://repository.upenn.edu/dissertations/AAI9627877

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