Growth in a Dual Economy
Growth and structural transformation of the manufacturing sector in developing countries are generally considered to be the result of the expansion of the "modem" (large-scale) sector relative to the "traditional" (small-scale) sector. Examining the sources of labor productivity growth in Mexican manufacturing, however, does not provide support for such a conclusion. Although we find that labor productivity levels vary almost in direct relation to establishment size, labor productivity growth shows no systematic variation by size class. In fact, small establishments have had the same rate of labor productivity growth as larger ones, partly because of the "excise-effect" (i.e. the exiting of low-productivity, small plants). Moreover, most of the variation in labor productivity across plant class sizes is found to be due to differences in capital intensity. The variation in TFP levels across size classes tends to be small. Thus, our results remove some justification of the policy measures that favor large firms in developing countries.
|Date of creation:||Aug 1993|
|Date of revision:|
|Publication status:||published as World Development, Vol. 25, no. 10 (October 1997): 1627-1637.|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
Web page: http://www.nber.org
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Magnus Blomstrom & Edward N. Wolff, 1989.
"Multinational Corporations and Productivity Convergence in Mexico,"
NBER Working Papers
3141, National Bureau of Economic Research, Inc.
- Blomstrom, Magnus & Wolff, E.N., 1989. "Multinational Corporations And Productivity Convergence In Mexico," Working Papers 89-28, C.V. Starr Center for Applied Economics, New York University.
- Levine, Ross & Renelt, David, 1992.
"A Sensitivity Analysis of Cross-Country Growth Regressions,"
American Economic Review,
American Economic Association, vol. 82(4), pages 942-63, September.
- Levine, Ross & Renelt, David, 1991. "A sensitivity analysis of cross-country growth regressions," Policy Research Working Paper Series 609, The World Bank.
- David Dollar & Edward N. Wolff, 1993. "Competitiveness, Convergence, and International Specialization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262041359.
- Patricio Meller, 1976. "Efficiency Frontiers for Industrial Establishments of Different Sizes," NBER Chapters, in: Explorations in Economic Research, Volume 3, number 3, pages 77-105 National Bureau of Economic Research, Inc.
- Paul M Romer, 1999.
"Increasing Returns and Long-Run Growth,"
Levine's Working Paper Archive
2232, David K. Levine.
- Ranis, Gustav, 1988. "Analytics of development: Dualism," Handbook of Development Economics, in: Hollis Chenery & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 1, chapter 4, pages 73-92 Elsevier.
- Blomström, Magnus & Wolff, Edward N, 1994.
"Growth in a Dual Economy,"
CEPR Discussion Papers
861, C.E.P.R. Discussion Papers.
- Kokko, Ari, 1994. "Technology, market characteristics, and spillovers," Journal of Development Economics, Elsevier, vol. 43(2), pages 279-293, April.
When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:4433. See general information about how to correct material in RePEc.
If references are entirely missing, you can add them using this form.