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Road infrastructure spillovers on the manufacturing sector in Mexico

Author

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  • Duran-Fernandez, Roberto
  • Santos, Georgina

Abstract

This paper investigates the effects of road infrastructure on industrial activity in Mexico from a quantitative perspective. It addresses three main issues. First, it investigates the existence of a relationship between road infrastructure and the industrial average product of labour. Second, it studies the determinants of such a relationship and quantifies the magnitude of the impact of road infrastructure on the average product of labour. Third, it analyses the spatial effects of road infrastructure in Mexico. The findings can be summarised as follows. First, road infrastructure has a positive and significant effect on the industrial average product of labour. However, not all the elements (roads or groups of roads) of the road system have the same effect. Second, we find that the actual magnitude of the effects of accessibility on the average product of labour depends on the physical attributes of the roads, as well as the peculiarities of the road network. Finally, we show that the regional gaps in the average product of labour across the country can be partially attributed to differences in infrastructure endowments. From a methodological perspective, the main contribution of this paper is the development of a comprehensive methodology for the analysis of some of the benefits of road infrastructure in Mexico. This methodology can be applied as a tool in the planning, implementation, and evaluation of actual infrastructure policy in this country.

Suggested Citation

  • Duran-Fernandez, Roberto & Santos, Georgina, 2014. "Road infrastructure spillovers on the manufacturing sector in Mexico," Research in Transportation Economics, Elsevier, vol. 46(C), pages 17-29.
  • Handle: RePEc:eee:retrec:v:46:y:2014:i:c:p:17-29
    DOI: 10.1016/j.retrec.2014.09.002
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    References listed on IDEAS

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    1. Holtz-Eakin, Douglas, 1994. "Public-Sector Capital and the Productivity Puzzle," The Review of Economics and Statistics, MIT Press, vol. 76(1), pages 12-21, February.
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    6. Aschauer, David Alan, 1989. "Is public expenditure productive?," Journal of Monetary Economics, Elsevier, vol. 23(2), pages 177-200, March.
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    8. Kevin M. Murphy & Andrei Shleifer & Robert W. Vishny, 1991. "The Allocation of Talent: Implications for Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 106(2), pages 503-530.
    9. Boarnet, Marlon G., 1996. "The Direct and Indirect Economic Effects of Transportation Infrastructure," University of California Transportation Center, Working Papers qt1506r290, University of California Transportation Center.
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    11. Garcia-Mila, Teresa & McGuire, Therese J & Porter, Robert H, 1996. "The Effect of Public Capital in State-Level Production Functions Reconsidered," The Review of Economics and Statistics, MIT Press, vol. 78(1), pages 177-180, February.
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    Citations

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    Cited by:

    1. Alejandro U. Becerra Ornelas & Héctor M. Núñez, 2017. "Stochastic Frontiers and Technical Efficiency of Local Public Expenditure in Mexico," Working papers DTE 603, CIDE, División de Economía.
    2. repec:eee:enepol:v:113:y:2018:i:c:p:20-27 is not listed on IDEAS
    3. Hallonsten, Jan Simon & Ziesemer, Thomas, 2016. "A semi-endogenous growth model for developing countries with public factors, imported capital goods, and limited export demand," MERIT Working Papers 004, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    4. Duran-Fernandez, Roberto, 2014. "Infrastructure policy in the USA–Mexico border: Evaluation and policy perspectives," Research in Transportation Economics, Elsevier, vol. 46(C), pages 70-102.
    5. repec:eee:retrec:v:70:y:2018:i:c:p:112-124 is not listed on IDEAS

    More about this item

    Keywords

    Road infrastructure; Industrial activity; Average product of labour; Road infrastructure spatial effects; Accessibility; Attraction-accessibility measures; Regional production function; Mexican manufacturing sector;

    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location
    • R4 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics
    • R42 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government and Private Investment Analysis; Road Maintenance; Transportation Planning
    • R53 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Public Facility Location Analysis; Public Investment and Capital Stock
    • N66 - Economic History - - Manufacturing and Construction - - - Latin America; Caribbean

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