Virtual Water Trade in North America

Affuso, E. and F. G. Mixon Jr. "Virtual Water Trade in North America", Economia Internazionale/International Economics, vol. LXVII Issue No. 3 August 2014, pp. 319-336.

20 Pages Posted: 18 Nov 2010 Last revised: 15 Nov 2014

See all articles by Ermanno Affuso

Ermanno Affuso

University of South Alabama - Mitchell College of Business - Department of Economics and Finance

Franklin G. Mixon Jr

Columbus State University

Date Written: July 31, 2014

Abstract

The concept of virtual water – the amount of water used during the entire production chain of goods – represents a new tool for policymakers in water-scarce countries to shape policies in ways that improve water use efficiency. The present study extends work on the virtual water concept by testing a causality relationship between national water savings and economic growth of a water scarce country. Results of this study are twofold: (1) average annual precipitations explain the virtual water trade pattern in Mexico, and (2) there exists a Granger-causality relationship between agricultural and industrial growth and the annual volume of water saved in Mexico due to its acquisition of water-intensive crops from its North American Free Trade Agreement partners – Canada and the United States.

Keywords: Virtual Water Trade, International Trade Theory, NAFTA, Granger-Causality

JEL Classification: F11, F13, F18, O13, Q17, Q25

Suggested Citation

Affuso, Ermanno and Mixon Jr, Franklin G., Virtual Water Trade in North America (July 31, 2014). Affuso, E. and F. G. Mixon Jr. "Virtual Water Trade in North America", Economia Internazionale/International Economics, vol. LXVII Issue No. 3 August 2014, pp. 319-336., Available at SSRN: https://ssrn.com/abstract=1710318 or http://dx.doi.org/10.2139/ssrn.1710318

Ermanno Affuso (Contact Author)

University of South Alabama - Mitchell College of Business - Department of Economics and Finance ( email )

College of Business and Management Studies
Mobile, AL 36688
United States
(251) 460-7908 (Phone)
(251) 460-6734 (Fax)

Franklin G. Mixon Jr

Columbus State University

Columbus, GA 31907-5645
United States

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