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The Impact of Infrastructure on Mexican Manufacturing Growth

Author

Listed:
  • Alejandro Castañeda

    (Centro de Estudios Económicos, El Colegio de México. México, D.F. Mexico)

  • Pablo Cotler

    (Departamento de Economía, Universidad Iberoamericana. México, D.F. Mexico)

  • Octavio Gutiérrez

    (Secretaría de Hacienda y Crédito Público. México, D.F. Mexico)

Abstract

This paper analyses the impact of infrastructure on the growth rate of the Mexican manufacturing sector. For such purpose, two measures of infrastructure are used: highways and electricity. Further, we also estimate the degree of returns to scale and the markup. We pooled two digit industries to obtain the estimates of the whole manufacturing sector. For the entire manufacturing sector, our results do not show evidence of increasing returns but the existence of market power cannot be rejected. We find that both types of public infrastructure have a significant effect on manufacturing growth and its inclusion reduces the estimated values of returns to scale and market power. Once we use sectoral data, we obtain mixed results: public infrastructure affects significantly only some sectors.

Suggested Citation

  • Alejandro Castañeda & Pablo Cotler & Octavio Gutiérrez, 2000. "The Impact of Infrastructure on Mexican Manufacturing Growth," Economía Mexicana NUEVA ÉPOCA, CIDE, División de Economía, vol. 0(2), pages 143-164, July-Dece.
    • Handle: RePEc:emc:ecomex:v:9:y:2000:i:2:p:143-164
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    References listed on IDEAS

    as
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