NAFTA Effect On Company Values And Performance

Abstract

This paper examines the long-term affect of NAFTA on company performances in Canada, Mexico, and the U.S.A. Our main focus is to study the impact of the liberalization process on various aspects of performance, including profitability, operating efficiency, investment, output, employment, leverage, and firm valuation. We discover that output, profitability and efficiency increased in all three countries, and other effects are country-specific. Overall, we find that NAFTA affected companies in the three countries positively and their profitability and efficiency increased which led to value increases.