Global Commodity Chains and Endogenous Growth: Export Dynamism and Development in Mexico and Honduras

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Mexico’s garment exports to the United States soared in the mid-1990s, and recently Honduras has become one of the fastest-growing exporters in the Americas. We find little evidence that the apparel sector’s dynamism is generating conditions for endogenous growth and sustainable development in either country, however. In spite of differences in the industrial organization of export-oriented garment production in Mexico and Honduras, the countries face similar challenges: regulatory regimes with rules of origin designed to benefit US fabric manufacturers, competitive pressures from China, and the broader institutional and macroeconomic environments associated with the region’s liberalization strategy.