The importance of institutions for the improvement of competitiveness in foreign trade

Abstract

Our country is currently recognized as having one of the most open economies in the world. However, in terms of cross-border trade, the 86th position out of 175 economies studied, according to World Bank reports, shows the lack of an efficient institutional framework, to the detriment of competitiveness. As a result, Mexican companies, in their attempt to be more competitive in international markets, often encounter certain bureaucratic obstacles that hinder the development of their operations abroad, raising their transaction costs. Thus, given that the institutional framework becomes a catalyst for economic development, the rules of the game must be transformed in order for companies to meet the competitiveness requirements necessary for survival and favorable incorporation into international markets. To this end, this study contextualizes the current situation of Mexican trade, based on the main concepts of the relationship between institutions and competitiveness.