Posted on 12/03/2006 12:55:25 PM PST by george76
APPARENTLY Wal-Mart doesn't just bring new business to foriegn countries; it also brings new business culture.
A new NBER paper by Beata Smarzynska Javorcik, Wolfgang Keller, and James Tybout looks at how the Mexican soap, detergent, and surfactants ("SDS") industry fared under NAFTA and GATT.
They found that the industry experienced gains in productivity and acquired a greater share of the US market—about what you would expect from opening markets.
What was unexpected was that the benefits didn't just come from lower costs of trade and the exposure to competition from foreign producers.
In fact, the biggest gains came from a fundamental change in the relationship between producers and retailers.
In particular, Wal-mart (or Walmex as it is called in Mexico) increased the productivity and market share of the Mexican SDS industry.
This means an improvement in welfare for Mexican and American consumers, who now have more, and cheaper, soaps to choose from.
The Mexican firms that stayed in business will increase their profits as they gain a larger share of the market, enhancing Mexico's economic development.
The authors also note the potential for a positive externality. To gain an even larger share of the US market, the Mexican firms will have to comply with regulations in many regions of the US that limit the phosphorus content of SDS products.
(Excerpt) Read more at economist.com ...
Openness and Industrial Responses in a Wal-Mart World: A Case Study of Mexican Soaps, Detergents and Surfactant Producers
http://www.nber.org/papers/w12457
The Mexican firms that stayed in business
could also read
The US firms that stayed in business
or
The (fill in your country here) firms that stayed in business
Might be something to that whole Darwin/Wallymart thing after all....
They sell ammo at a reasonable price.
"Mexican Soaps"
I think the technical term is "telenovelas".
ping
Off the subject.
Then don't!!
Just don't deprive me of shopping there.
Wasn't Walmart of Mexico once called Cifra?
Even better than the low priced goods is that these Mexican businesses will employ Mexicans - keeping them south of the Border!
I'm all for NAFTA if it improves the economic climate in Mexico and provides jobs for Mexicans in their own country.
" I'm all for NAFTA if it improves the economic climate in Mexico and provides jobs for Mexicans in their own country."
I think that this was one of the important goals. Hopefully it will be more so with their new President.
I'm an old guy but can still put up quite a fight, that's why Wal-Mart has to send two of their goons at a time to come to my house and make me go shopping there.
Gabz: Ping.
That is the debate.
12 years on[Since NAFTA]and the illegals keep coming. How long do we keep a trade agreement if it does seem to favor US. Thats another debate. Anyway, trying not to get off the thread topic.
That wonderful bagged Mexican detergent with the overpowering smell.
Wal-mart is my store of choice.
ping
" To gain an even larger share of the US market, the Mexican firms will have to comply with regulations in many regions of the US that limit the phosphorus content of SDS products.
At this point, it is not financially viable for Mexican firms to lower their levels of phosphate, but if they want to capture more of the US market, they will have to make the production of their detergents more environmentally friendly."
I like saving money. I really don't want to pay 20% more elsewhere when i can get 80% of the stuff I need there.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.