The manufacturing industry in Mexico: pandemic and financialization

Abstract

The character of the Mexican crisis was that the main manufacturing industries registered a drop in production in high percentages. The decrease in industrial production is investigated from the point of view of: the use of the capacity of the automotive and electronics industry; and the influence of financialization on fixed investment. The study of the endogenous rate of utilization of the capacity of the industries built by oligopolistic companies reveals the existence of the dynamic emissive adjustment. The deterioration of the automotive industry corresponds to the movement of the industry towards unstable equilibrium, because: 1) most of the intermediate goods industry is made up of domestic companies; 2) the diminished production of intermediate goods elaborated the supply restriction of the automotive industry; and 3) the value of the circulation of securities and shares on the Mexican Stock Exchange (BMV), decreased due to the pandemic, since fixed investment was limited.