Canadian and United states managers identified NAFTA‐related benefits and threats. These factors were related to the managers' overall perceptions of the effect of NAFTA on firm performance. Results indicated that NAFTA's perceived benefits include increased access to the Mexican market and to other Latin American markets, improved customs procedures, and increased effectiveness and efficiency in logistics. However, managers were concerned about inefficiencies in logistics and customs procedures, currency fluctuations, and differences in culture and business practices. Managers with little experience in Mexico had lower estimates of NAFTA's potential benefits, the barriers to trade in Mexico, and NAFTA's potential positive impact on their firm's performance. They also believed that NAFTA's primary influence on firm performance arises from the increased access to Latin American markets, while barriers in Mexico were discounted. The view of experienced managers was balanced: NAFTA's benefits were weighed against Mexico's drawbacks. Access to the Mexican market was important, but not as important as logistics‐related benefits.
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