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Regional Differences of Production and Efficiency of Mexican Manufacturing: An Application of Nested and Stochastic Frontier Panel Models

Author

Listed:
  • Frauke G. Braun
  • Astrid Cullmann

    (German Institute for Economic Research (DIW Berlin), Germany)

Abstract

This study examines the regional divide for Mexican manufacturing. Mexico's north-south disparity is widely noted, but rarely analyzed empirically and at detailed regional level. We use a panel of municipality-level data to estimate regional production functions. An important contribution is the application of nested panel and stochastic frontier models to capture latent regional characteristics and the computation of performance indicators for all municipalities. There is evidence for considerable differences in economic structure and productivity of the south to the central manufacturing belt and the north. Variation of efficiency is however pronounced, indicating that strong municipalities prevail in highly inefficient states.

Suggested Citation

  • Frauke G. Braun & Astrid Cullmann, 2011. "Regional Differences of Production and Efficiency of Mexican Manufacturing: An Application of Nested and Stochastic Frontier Panel Models," Journal of Developing Areas, Tennessee State University, College of Business, vol. 45(1), pages 291-311, July-Dece.
    • Handle: RePEc:jda:journl:vol.45:year:2011:issue1:pp:291-311
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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. Alejandro U. Becerra-Ornelas & Hector M. Nuñez, 2019. "The technical efficiency of local economies in Mexico: a failure of decentralized public spending," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 62(2), pages 247-264, April.
    3. Juan Carlos Chávez-Martín del Campo & Felipe de Jesús Fonseca-Hernández, 2013. "Technical Efficiency, Technological Development, And The Labor Productivity Gap In Mexican Manufacturing," Regional and Sectoral Economic Studies, Euro-American Association of Economic Development, vol. 13(2), pages 43-58.
    4. José Contreras & Andrés Santeliz & Oscar Carvallo, 2012. "Patterns of technical efficiency in the Venezuelan manufacturing sector (2007)," Economía, Instituto de Investigaciones Económicas y Sociales (IIES). Facultad de Ciencias Económicas y Sociales. Universidad de Los Andes. Mérida, Venezuela, vol. 37(34), pages 121-137, july-dece.
    5. Antonio Alvarez & Rafael Garduño-Rivera & Hector M. Nuñez, 2017. "Mexico's North-South divide: The regional distribution of state inefficiency 1988–2008," Papers in Regional Science, Wiley Blackwell, vol. 96(4), pages 843-858, November.
    6. Jaime A. Prudencio‐Vázquez & Esteban Fernandez Marquez & Fernando Rubiera Morollón, 2022. "Productivity and agglomeration economies in the manufacturing of the metropolitan areas of Mexico, 1998–2018," Regional Science Policy & Practice, Wiley Blackwell, vol. 14(5), pages 1188-1200, October.
    7. Álvarez, Antonio & Garduño, Rafael & Núñez, Héctor, 2016. "Modelling the effect of crime on economic activity: The case of Mexican states," Efficiency Series Papers 2016/01, University of Oviedo, Department of Economics, Oviedo Efficiency Group (OEG).
    8. Antonio Álvarez-Pinilla & Rafael Garduño-Rivera & Héctor M. Núñez, 2015. "Estimating the Technical Efficiency of Mexican States," Working papers DTE 588, CIDE, División de Economía.
    9. Chávez Juan Carlos & Fonseca Felipe J., 2012. "Technical and Structural Efficiency in Mexican Manufacturing: A Regional Approach," Working Papers 2012-03, Banco de México.

    More about this item

    Keywords

    Regional Sciences; Panel Data Models; Stochastic Frontier Analysis; Manufacturing Industries; Mexico;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure

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