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Multifactor Productivity and its Determinants: An Empirical Analysis for Mexican Manufacturing

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  • Salgado Banda Héctor
  • Bernal Verdugo Lorenzo E.

Abstract

We use data from the Annual Industrial Survey for 1996-2003. First, we estimate production functions by means of growth accounting exercises and panel data econometrics for the whole sector and for 14 comprehensive groups. Various measures of Multifactor Productivity (MFP) are constructed, as we consider diverse combinations of inputs with capital, labour, electricity and transport. This allows us to compare MFP growth rates between groups. Second, we analyse econometrically some of the determinants of MFP and Labour Productivity (LP) growth. We find that, on the one hand, there is some evidence of a positive relationship between market concentration and technology adoption; on the other hand, both technology adoption and human capital seem to be promoting productivity, whilst market concentration is exerting a negative influence on it. In sum, our results suggest that, once controlling for the effect on technology adoption, more concentration (conversely, less competition) has a negative impact on productivity.

Suggested Citation

  • Salgado Banda Héctor & Bernal Verdugo Lorenzo E., 2007. "Multifactor Productivity and its Determinants: An Empirical Analysis for Mexican Manufacturing," Working Papers 2007-09, Banco de México.
    • Handle: RePEc:bdm:wpaper:2007-09
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    2. Sánchez-Valadez, Manuel, 2012. "Decisiones financieras, competencia en el mercado y desempeño de las empresas: Evidencia empírica para Iberoamérica/Financial Decisions, Market Competition and Firm Performance: Empirical Evidence for," Estudios de Economia Aplicada, Estudios de Economia Aplicada, vol. 30, pages 359(36)-359, Abril.
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    6. Juan Carlos Chávez Martín del Campo & Luis Fernando López Ornelas, 2014. "Un enfoque no paramétrico para la descomposición de la productividad del trabajo en la industria manufacturera regional," Ensayos Revista de Economia, Universidad Autonoma de Nuevo Leon, Facultad de Economia, vol. 0(2), pages 33-58, November.
    7. Frauke G. Braun & Astrid Cullmann, 2008. "Key Parameters and Efficiency of Mexican Manufacturing: Are There Still Differences between the North and the South? An Application of Nested and Stochastic Frontier Panel Data Models," Discussion Papers of DIW Berlin 816, DIW Berlin, German Institute for Economic Research.
    8. Amoroso Nicolás & Chiquiar Daniel & Quella Núria & Ramos Francia Manuel, 2008. "Determinants of Mexico's Comparative Advantages and of the Performance of its Manufacturing Exports during 1996-2005," Working Papers 2008-01, Banco de México.
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    More about this item

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms

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