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Barriers to Export in Emerging Markets: An Empirical Study of Mexican Exporters
Unformatted Document Text:  Korea, and many European Union nations in 2006 2 . Approximately 50% of all exports from Latin America originate in Mexico and, in terms of overall trade, Mexico ranked as the world’s 14 th in terms of GDP in 2007 3 . As a result of decades of protectionism, Mexico, as well as other emerging economies with similar economic histories, faced the reality of underdevelopment of industries, inefficiencies, outdated technologies, shortages of skilled workers, and lack of entrepreneurial talent. Although exports were never prohibited as were imports in Mexico, the culture of export and international trade was not strongly inculcated for numerous reasons (Pazos, 1997; Bergoing et al. 2002). Among the most important include the absence of an import/export reciprocity philosophy in its former import-substitution trade policy and overall lack of competitiveness in almost all industries except in oil exports and other commodities. Mexico, among the most debt-ridden nations of the world in the 1980s, under pressure from a paralyzed economy with rampant inflation, took the initial step in radically realigning Mexico’s international macroeconomic policy. It turned from extreme protectionism to open market economics and embraced export-based growth. Since then, it has experienced an impressive development in the diversification of its export base particularly in reference to its value-added products. It stands now as a major emerging economy in the world and has improved dramatically its competitiveness since its integration into the North America Free Trade Agreement (NAFTA) since 1994. However, a vulnerable point lies in the fact that currently the Mexican economy is highly dependent on the U.S. which consumes approximately 85% of its exports (Mexico’s Secretaria de Economia, 2008). It also lags behind in terms of logistics development and infrastructure, as revealed by a recent World Bank Study 4 , where Mexico appears behind countries such as South Korea, China , India, Chile, Argentina or Panama, in their International LPI (Logistics performance.Index) ranking. Empirical analysis Sample and data collection The purpose of this project was to collect specific attitudinal, motivational, and demographic information to be used in addressing questions regarding exporting and potential exporting firms’ perceptions of the barriers they encounter during the internationalization process. The target population consisted of exporting firms operating in the South-Central Region in Mexico, including the six states of: Veracruz, Oaxaca, Tlaxcala, Hidalgo, Chiapas, and Puebla. The respondents were managers or firm owners with key decision-making positions with respect to export operations. The industries represented include: food, beverages, and tobacco; auto parts; leather products or footwear; electrical goods and 2 http://www.wto.org/english/res_e/statis_e/its2007_e/section1_e/i08.xls 3 http://siteresources.worldbank.org/DATASTATISTICS/Resources/GDP.pdf 4 http://info.worldbank.org/etools/tradesurvey/mode1b.asp#ranking 7

Authors: Johnson, Robyn. and Duhamel, Francois.
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Korea, and many European Union nations in 2006
. Approximately 50% of all exports from Latin America originate in 
Mexico and, in terms of overall trade, Mexico ranked as the world’s 14
th
 in terms of GDP in 2007
As a result of decades of protectionism, Mexico, as well as other emerging economies with similar economic histories, 
faced the reality of underdevelopment of industries, inefficiencies, outdated technologies, shortages of skilled workers, and 
lack of entrepreneurial talent. Although exports were never prohibited as were imports in Mexico, the culture of export and 
international trade was not strongly inculcated for numerous reasons (Pazos, 1997; Bergoing et al. 2002).  Among the most 
important include the absence of an import/export reciprocity philosophy in its former import-substitution trade policy and 
overall lack of competitiveness in almost all industries except in oil exports and other commodities.  
Mexico, among the most debt-ridden nations of the world in the 1980s, under pressure from a paralyzed economy with 
rampant inflation, took the initial step in radically realigning Mexico’s international macroeconomic policy. It turned from 
extreme protectionism to open market economics and embraced export-based growth. Since then, it has experienced an 
impressive development in the diversification of its export base particularly in reference to its value-added products. It 
stands   now   as   a   major   emerging   economy   in   the   world   and   has   improved   dramatically   its   competitiveness   since   its 
integration into the North America Free Trade Agreement (NAFTA) since 1994. However, a vulnerable point lies in the fact 
that currently the Mexican economy is highly dependent on the U.S. which consumes approximately 85% of its exports 
(Mexico’s  Secretaria de Economia, 2008). It also lags behind in terms of logistics development and infrastructure, as 
revealed by a recent World Bank Study
, where Mexico appears behind countries such as South Korea, China , India, Chile, 
Argentina or Panama, in their International LPI (Logistics performance.Index) ranking. 
Empirical analysis
Sample and data collection
The purpose of this project was to collect specific attitudinal, motivational, and demographic information to be used in 
addressing questions regarding exporting and potential exporting firms’ perceptions of the barriers they encounter during 
the internationalization process. The target population consisted of exporting firms operating in the South-Central Region in 
Mexico, including the six states of: Veracruz, Oaxaca, Tlaxcala, Hidalgo, Chiapas, and Puebla. 
The respondents were managers or firm owners with key decision-making positions with respect to export operations. The 
industries represented include: food, beverages, and tobacco; auto parts; leather products or footwear; electrical goods and 
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