Analysis of Horizontal Price Transmission: The Case of Mexico–United States Dry Bean Trade
Antonio Aguilar-Lopez, Aleš Kuhar
Dry bean is the leading source of plant-based proteins in Mexico, yet the country's self-sufficiency shows an eroding tendency after the enforcement of NAFTA. During this period, the United States became Mexico's principal supplier of dry beans. The purpose of this paper is to analyse the price transmission for black and pinto dry beans in Mexico in the period between 2012 and 2019. The research results however reveal only a very limited relationship between the analysed prices in the two countries. It is established that price dynamics are predominantly governed by domestic market interactions rather than those transmitted across the border, hence the erosion of Mexico's self-sufficiency in dry bean cannot be entirely attributed to the trade liberalization.