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Economic structure, productivity, and infrastructure quality in southern Mexico

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  • Deichmann, Uwe
  • Fay, Marianne
  • Jun Koo
  • Lall, Somik V.

Abstract

There are large and sustained differences in the economic performance of sub-national regions in most countries. The authors examine the economic structure and productivity in Southern Mexico and compare it with the rest of the country. The authors use firm level data from Mexican manufacturing to test the relative importance of firm level characteristics (such as human capital and technology adoption) compared with external characteristics (such as infrastructure quality and regulatory environment) in explaining productivity differentials. The authors find that the economic structure of Southern Mexico is considerably different from the rest of the country, with the economic landscape dominated by micro enterprises and a relative specialization in low productivity activities. This, coupled with low skill levels and fewer skill upgrading opportunities, reduces the performance of Southern firms. Productivity differentials between Southern firms and others, however, only exist for micro enterprises. The econometric analysis shows that while employee training and technology adoption enhance productivity, access to markets by improving transport infrastructure that link urban areas also have important productivity effects.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 2900.

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Date of creation: 31 Oct 2002
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Handle: RePEc:wbk:wbrwps:2900

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Keywords: Labor Policies; Economic Theory&Research; Municipal Financial Management; Environmental Economics&Policies; Banks&Banking Reform; Environmental Economics&Policies; Economic Theory&Research; Banks&Banking Reform; Municipal Financial Management; Microfinance;

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  1. Masahisa Fujita & Paul Krugman & Anthony J. Venables, 2001. "The Spatial Economy: Cities, Regions, and International Trade," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262561476, December.
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Cited by:
  1. Patrick Bayer & Christopher Timmins, 2007. "Estimating Equilibrium Models Of Sorting Across Locations," Economic Journal, Royal Economic Society, vol. 117(518), pages 353-374, 03.
  2. Patrick J. Bayer & Christopher D. Timmins, 2004. "A Note on the Equilibrium Properties of Locational Sorting Models," Yale School of Management Working Papers ysm411, Yale School of Management.
  3. Andrés Rodríguez-Pose & Vassilis Tselios, 2010. "Inequalities in income and education and regional economic growth in western Europe," The Annals of Regional Science, Springer, vol. 44(2), pages 349-375, April.
  4. Fan, Shenggen & Chan-Kang, Connie, 2005. "Road development, economic growth, and poverty reduction in China:," Research reports 138, International Food Policy Research Institute (IFPRI).
  5. Wei Zou & Fen Zhang & Ziyin Zhuang & Hairong Song, 2008. "Transport Infrastructure, Growth, and Poverty Alleviation: Empirical Analysis of China," Annals of Economics and Finance, Society for AEF, vol. 9(2), pages 345-371, November.
  6. Straub, Stephane, 2008. "Infrastructure and growth in developing countries : recent advances and research challenges," Policy Research Working Paper Series 4460, The World Bank.
  7. Gunasekera, Kumudu & Anderson, William & Lakshmanan, T.R., 2008. "Highway-Induced Development: Evidence from Sri Lanka," World Development, Elsevier, vol. 36(11), pages 2371-2389, November.
  8. Montes-Rojas, Gabriel & Santamaria, Mauricio, 2007. "Sources of productivity growth: Evidence from the Mexican manufacturing sector," The North American Journal of Economics and Finance, Elsevier, vol. 18(3), pages 263-278, December.
  9. Christian K.M. Kingombe & Salvatore di Falco, 2012. "Labour Market and Fiscal Policy," IHEID Working Papers 04-2012, Economics Section, The Graduate Institute of International Studies, revised 28 Feb 2012.
  10. Torres Preciado, Víctor Hugo & Polanco Gaytán, Mayrén & Manzanares Rivera, José Luis, 2010. "Diferencias en el ingreso per cápita regional e infraestructura de transporte en México
    [Differences in per capita regional income and transport infrastructure in Mexico]
    ," MPRA Paper 28081, University Library of Munich, Germany.

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