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Economic structure, productivity, and infrastructure quality in Southern Mexico

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

    ()

Abstract

There are large and sustained differences in the economic performance of sub-national regions in most countries. In this paper, we examine economic structure and productivity in Southern Mexico and compare these to the rest of the country. We employ firm level data from Mexican manufacturing to test the relative importance of firm level characteristics such as human capital and technology adoption compared to external characteristics such as infrastructure quality and regulatory environment in explaining productivity differentials. We find that the economic structure of the South is considerably different from the rest of the country, with the economic landscape being 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 and other firms, however, only exist for micro enterprises. The econometric analysis shows that while employee training and technology adoption enhance productivity, access to markets through improvements in transport infrastructure linking urban areas also have important productivity effects. Copyright Springer-Verlag 2004

Suggested Citation

  • Uwe Deichmann & Marianne Fay & Jun Koo & Somik V. Lall, 2004. "Economic structure, productivity, and infrastructure quality in Southern Mexico," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 38(3), pages 361-385, September.
  • Handle: RePEc:spr:anresc:v:38:y:2004:i:3:p:361-385 DOI: 10.1007/s00168-003-0171-8
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    References listed on IDEAS

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    Cited by:

    1. Ali,Rubaba & Barra,Alvaro Federico & Berg,Claudia N. & Damania,Richard & Nash,John D. & Russ,Jason Daniel, 2015. "Transport infrastructure and welfare : an application to Nigeria," Policy Research Working Paper Series 7271, The World Bank.
    2. Straub, Stephane, 2008. "Infrastructure and growth in developing countries : recent advances and research challenges," Policy Research Working Paper Series 4460, The World Bank.
    3. 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.
    4. Patrick Bayer & Christopher Timmins, 2007. "Estimating Equilibrium Models Of Sorting Across Locations," Economic Journal, Royal Economic Society, vol. 117(518), pages 353-374, March.
    5. 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.
    6. 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.
    7. 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.
    8. Patrick Bayer & Christopher Timmins, 2003. "A Note on the Equilibrium Properties of Locational Sorting Models," Working Papers 861, Economic Growth Center, Yale University.
    9. Andrés Rodríguez-Pose & Vassilis Tselios, 2010. "Inequalities in income and education and regional economic growth in western Europe," The Annals of Regional Science, Springer;Western Regional Science Association, pages 349-375.
    10. Andrew R. Goetz, 2011. "The Global Economic Crisis, Investment in Transport Infrastructure, and Economic Development," Chapters,in: Transportation and Economic Development Challenges, chapter 3 Edward Elgar Publishing.
    11. Duran-Fernandez, Roberto & Santos, Georgina, 2014. "A regional model of road accessibility in Mexico: Accessibility surfaces and robustness analysis," Research in Transportation Economics, Elsevier, vol. 46(C), pages 55-69.
    12. Andrés Rodríguez-Pose & Vassilis Tselios, 2010. "Inequalities in income and education and regional economic growth in western Europe," The Annals of Regional Science, Springer;Western Regional Science Association, pages 349-375.
    13. Christian K.M. Kingombe & Salvatore di Falco, 2012. "The Impact of a Feeder Road Project on Cash Crop Production in Zambia’s Eastern Province between 1997 and 2002, Labour Market and Fiscal Policy," IHEID Working Papers 04-2012, Economics Section, The Graduate Institute of International Studies, revised 28 Feb 2012.
    14. Fan, Shenggen & Chan-Kang, Connie, 2004. "Road development, economic growth, and poverty reduction in China," DSGD discussion papers 12, International Food Policy Research Institute (IFPRI).
    15. 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.
    16. Bayer, Patrick & Timmins, Christopher, 2005. "On the equilibrium properties of locational sorting models," Journal of Urban Economics, Elsevier, vol. 57(3), pages 462-477, May.

    More about this item

    Keywords

    R12; R3; O18;

    JEL classification:

    • 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
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure

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