IDEAS home Printed from https://ideas.repec.org/p/bdm/wpaper/2012-03.html
   My bibliography  Save this paper

Technical and Structural Efficiency in Mexican Manufacturing: A Regional Approach

Author

Listed:
  • Juan Carlos Chávez
  • Felipe J. Fonseca

Abstract

This paper applies a stochastic frontier approach to analyze the evolution of technical efficiency in manufacturing as a source of regional growth, taking as a unit of analysis the Mexican states in the period 1988-2008. The main findings of our analysis are threefold. First, technical efficiency was increasing over the analyzed period and acted as a mechanism to reduce the labor productivity gap across states. Second, Mexican regions can increase manufacturing production about one third, on average, using the same amount of inputs which implies ample potential for regional growth. Third, there exists a considerable difference in the level of technological development, measured in terms of structural efficiency, of the north and the central regions with respect to the south that partially explains the labor productivity gap among regions.

Suggested Citation

  • Juan Carlos Chávez & Felipe J. Fonseca, 2012. "Technical and Structural Efficiency in Mexican Manufacturing: A Regional Approach," Working Papers 2012-03, Banco de México.
  • Handle: RePEc:bdm:wpaper:2012-03
    as

    Download full text from publisher

    File URL: http://www.banxico.org.mx/publicaciones-y-discursos/publicaciones/documentos-de-investigacion/banxico/%7BE334B5A0-AEC4-47D5-DABC-249F8B74AB71%7D.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Robert E. Hall & Charles I. Jones, 1999. "Why do Some Countries Produce So Much More Output Per Worker than Others?," The Quarterly Journal of Economics, Oxford University Press, vol. 114(1), pages 83-116.
    2. Battese, George E. & Corra, Greg S., 1977. "Estimation Of A Production Frontier Model: With Application To The Pastoral Zone Of Eastern Australia," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 21(03), December.
    3. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-499, June.
    4. Duffy, John & Papageorgiou, Chris, 2000. "A Cross-Country Empirical Investigation of the Aggregate Production Function Specification," Journal of Economic Growth, Springer, vol. 5(1), pages 87-120, March.
    5. Antonio Alvarez, 2007. "Decomposing regional productivity growth using an aggregate production frontier," The Annals of Regional Science, Springer;Western Regional Science Association, pages 431-441.
    6. Mercedes Gumbau-Albert, 2000. "Efficiency and technical progress: sources of convergence in the Spanish regions," Applied Economics, Taylor & Francis Journals, vol. 32(4), pages 467-478.
    7. George E. Battese & Greg S. Corra, 1977. "Estimation Of A Production Frontier Model: With Application To The Pastoral Zone Of Eastern Australia," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 21(3), pages 169-179, December.
    8. Kumbhakar, Subal C. & Wang, Hung-Jen, 2005. "Estimation of growth convergence using a stochastic production frontier approach," Economics Letters, Elsevier, vol. 88(3), pages 300-305, September.
    9. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, pages 21-37.
    10. Meeusen, Wim & van den Broeck, Julien, 1977. "Efficiency Estimation from Cobb-Douglas Production Functions with Composed Error," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 18(2), pages 435-444, June.
    11. Ernesto López-Córdova, 2003. "NAFTA and Manufacturing Productivity in Mexico," ECONOMIA JOURNAL OF THE LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION, ECONOMIA JOURNAL OF THE LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION, vol. 0(Fall 2003), pages 55-98, August.
    12. Schmutzler, Armin, 1999. " The New Economic Geography," Journal of Economic Surveys, Wiley Blackwell, vol. 13(4), pages 355-379, September.
    13. Kumbhakar,Subal C. & Lovell,C. A. Knox, 2003. "Stochastic Frontier Analysis," Cambridge Books, Cambridge University Press, number 9780521666633, December.
    14. 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.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Manufacturing; mexican regions; stochastic frontier; structural efficiency; technical efficiency.;

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bdm:wpaper:2012-03. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dirección de Sistemas). General contact details of provider: http://edirc.repec.org/data/bangvmx.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.