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Production, Employment And Public Investment In Northern Border Of Mexico, Produccion, Empleo E Inversion Publica En La Frontera Norte De Mexico

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  • Isaac Leobardo Sanchez Juarez
  • Rosa Maria Garcia Almada

Abstract

This paper focuses on the behavior of output per person and employment in Mexico's northern border. We compare growth of the region with respect to national averages, this for the purpose of diagnosis and subsequent design of public policy. The basic assumption is that public investment has a favorable impact on the growth of output and employment. We used a panel data model that evaluates the specified variables and includes foreign direct investment, gross formation of fixed capital formation and education. The results do not confirm our hypothesis. We found a negative relationship between public investment, production and employment, which can be explained by the effects of crowding-out that government spending has on private investment.

Suggested Citation

  • Isaac Leobardo Sanchez Juarez & Rosa Maria Garcia Almada, 2014. "Production, Employment And Public Investment In Northern Border Of Mexico, Produccion, Empleo E Inversion Publica En La Frontera Norte De Mexico," Revista Internacional Administracion & Finanzas, The Institute for Business and Finance Research, vol. 7(7), pages 111-126.
    • Handle: RePEc:ibf:riafin:v:7:y:2014:i:7:p:111-126
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    References listed on IDEAS

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    1. Joan Costa-i-Font & Eduardo Rodriguez-Oreggia, 2005. "Is the Impact of Public Investment Neutral Across the Regional Income Distribution? Evidence from Mexico," Economic Geography, Taylor & Francis Journals, vol. 81(3), pages 305-322, July.
    2. Lucas Aníbal Pussetto, 2002. "Gasto Público Y Crecimiento Económico: Evidencia Para El Caso Argentino," Documentos CEDE 2759, Universidad de los Andes, Facultad de Economía, CEDE.
    3. Joan Costa-Font & Eduardo Rodríguez-Oreggia, 2006. "Path Dependency and the Allocation of Public Investment in Mexico," Environment and Planning C, , vol. 24(2), pages 297-311, April.
    4. Marianna Belloc & Pietro Vertova, 2006. "Public Investment and Economic Performance in Highly Indebted Poor Countries: An Empirical Assessment," International Review of Applied Economics, Taylor & Francis Journals, vol. 20(2), pages 151-170.
    5. Ward Romp & Jakob De Haan, 2007. "Public Capital and Economic Growth: A Critical Survey," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 8(S1), pages 6-52, April.
    6. Barro, Robert J, 1990. "Government Spending in a Simple Model of Endogenous Growth," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 103-126, October.
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    More about this item

    Keywords

    Mexico; Northern Border; Production; Employment; Public Investment;
    All these keywords.

    JEL classification:

    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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